According to sources familiar with the matter, Apple Inc. is deferring bonuses for some of its corporate divisions and expanding its cost-cutting efforts, joining other Silicon Valley peers in streamlining operations during uncertain times.
Under the new plan, a portion of Apple’s corporate workforce will see reduced bonuses, and the company is limiting hiring for more jobs and leaving additional positions open when employees depart. Previously, Apple typically provided bonuses and promotions once or twice per year, with the twice-a-year teams receiving these payouts in April and October. Under the new plan, all divisions will move to an annual schedule, with payments occurring only in October.
Apple began a belt-tightening effort last July, reducing budgets, cutting headcount goals, and pausing hiring across several divisions. The company is now facing a sales slowdown, putting pressure on keeping its operations lean. Despite this, Apple employees have generally been in a less precarious position than those at other big Silicon Valley companies, such as Meta Platforms Inc. and Alphabet Inc.’s Google, which have undergone deep cuts.
The move to reduce bonuses could come as a blow to staff, who often rely on these payouts for personal budgeting. The change could also potentially help retain employees who may have planned to leave the company after receiving the April payout. The move applies to engineers and other non-managers, as well as mid-level managers, but not senior employees at the director level and above. Apple’s highest-ranking employees typically see their bonuses paid quarterly.
As part of its cost-cutting efforts, Apple has reined in travel budgets and is now requiring senior vice president approval for more budget items. The company has also laid off some contract workers across the company. In addition, Apple’s human-resources department has been taking a closer look at how often employees come to the office, requiring employees to work from an Apple building three times per week.
While Apple shares initially rose, they later pared gains after the news of the bonus cuts was reported. Apple CEO Tim Cook said during the company’s shareholder meeting last week that the company continues to be careful with money and “deliberate when it comes to hiring.” Cook is also taking a pay cut himself, with his compensation for 2023 set to fall by more than 40% to about $49 million.