Apple cutting costs with bonus payment changes, hiring freeze

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Apple's efforts to cut costs has led it to extend its hiring freeze into more areas, a report claims, as well as making changes to how it doles out promotions and bonuses to employees.

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While other major names in tech are performing mass layoffs, such as Meta's massive offloading of staff, Apple has tried to minimize how many people it lets go. Though it has worked so far, the iPhone maker seems to be preparing to take more steps to reduce its outlay.

According to a number of people with knowledge of the situation speaking to Bloomberg, Apple is expanding its cost-cutting efforts in a number of ways.

One way to streamline finances that the company plans is to cut down on the number of times a year it performs bonus payouts from twice a year to just once. While this will vary between divisions, the trend will be eliminating the April payment in favor of just an October one.

Despite reducing the number of payment instances, employees are still expected to get their full bonus entitlement for the year.

Along with bonus changes, Apple is also going to refine its existing policies over a hiring freeze. Apple has already been slowing down its hiring practices since 2022, with the company deciding to leave positions unfilled when employees exit to reduce the headcount.

Under Tuesday's report, it seems the policy will now apply to more areas of the company, and therefore more jobs.

At the time of the November reports, an Apple spokesperson insisted the company was continuing to hire but was taking a "very deliberate approach in some parts of the business."

Read on AppleInsider

Comments

  • Reply 1 of 16
    I'm trying to understand how moving from two bonuses a year to one bonus that is twice as big saves any money.... Apple earns an extra 6 months of interest on the spring bonuses? Maybe there is an accounting benefit to paying bonuses later in the year? Less paperwork? Employees forced to work in an office might quit before getting their bonus? I don't get it... This is hardly National Lampoon's Christmas Vacation...
    edited March 2023 grandact73
  • Reply 2 of 16
    macxpressmacxpress Posts: 5,849member
    I fail to see how taking a company like Apple which has record profits doesn't just keep going status quo. It's not like they cannot afford it. I'm glad Apple isn't following suit and being ridiculous in laying people off because they "think" a recession is coming at some point but it would be nice to see them just not putting extra profits over keeping employees happy. 
    iOS_Guy80lkrupp
  • Reply 3 of 16
    I'm trying to understand how moving from two bonuses a year to one bonus that is twice as big saves any money.... Apple earns an extra 6 months of interest on the spring bonuses? Maybe there is an accounting benefit to paying bonuses later in the year? Less paperwork? Employees forced to work in an office might quit before getting their bonus? I don't get it... This is hardly National Lampoon's Christmas Vacation...
    It probably depends on when the bonuses happen. If there are two then I would presume that one is at the six month period and the second is at the end of the year. So If Apple deferrers bonuses from June/July (halfway point) to December/January (end of year) they will pay the same amount but boost their finical numbers for what is a slower time of the year (June/July) and absorb the financial hit in what is the strongest part of the year. It's a shell game but will probably pacify investors?
    muthuk_vanalingamFileMakerFellerBart Y
  • Reply 4 of 16
    Rogue01Rogue01 Posts: 164member
    macxpress said:
    I fail to see how taking a company like Apple which has record profits doesn't just keep going status quo. It's not like they cannot afford it. I'm glad Apple isn't following suit and being ridiculous in laying people off because they "think" a recession is coming at some point but it would be nice to see them just not putting extra profits over keeping employees happy. 
    The recession is looming.  Inflation at an all time high.  And even Apple's operating costs have increased because water, power, natural gas, have all gone up in price.  Apple is laying people off through attrition.  They are not replacing people that leave.  Same as laying people off because they redistribute the work to others and have them take on more work.  They just did that when a VP of Design left and those duties are now passed on to someone else and the position not being replaced or filled.  So that makes them 'look good' by not publicly announcing layoffs, but the people have to take on more work for the same pay because Apple won't fill the now vacant position.  They just eliminate it instead.
    williamlondongrandact73Bart Y
  • Reply 5 of 16
    sunman42sunman42 Posts: 279member
    Rogue01 said:

    The recession is looming.  Inflation at an all time high.  And even Apple's operating costs have increased because water, power, natural gas, have all gone up in price.  Apple is laying people off through attrition.  They are not replacing people that leave.  Same as laying people off because they redistribute the work to others and have them take on more work.  They just did that when a VP of Design left and those duties are now passed on to someone else and the position not being replaced or filled.  So that makes them 'look good' by not publicly announcing layoffs, but the people have to take on more work for the same pay because Apple won't fill the now vacant position.  They just eliminate it instead.

    ——

    A recession may be coming, but that’s still TBD.

    Inflation is not at an all time high, and hasn’t been (ask any of the boomers around in the late ‘70s and early ‘80s). Rates of inflation have been dropping in the US for the last eight months. 

    Please don’t spread misinformation.

    williamlondonFileMakerFeller
  • Reply 6 of 16
    jdwjdw Posts: 1,380member
    sunman42 said:
    Rogue01 said:

    The recession is looming.  Inflation at an all time high.  And even Apple's operating costs have increased because water, power, natural gas, have all gone up in price.  Apple is laying people off through attrition.  They are not replacing people that leave.  Same as laying people off because they redistribute the work to others and have them take on more work.  They just did that when a VP of Design left and those duties are now passed on to someone else and the position not being replaced or filled.  So that makes them 'look good' by not publicly announcing layoffs, but the people have to take on more work for the same pay because Apple won't fill the now vacant position.  They just eliminate it instead.

    ——

    A recession may be coming, but that’s still TBD.

    Inflation is not at an all time high, and hasn’t been (ask any of the boomers around in the late ‘70s and early ‘80s). Rates of inflation have been dropping in the US for the last eight months. 

    Please don’t spread misinformation.

    Please don't quote your own reply! That is perhaps worse than any "misinformation" one observed in the post by Rogue01.  

    Also, your mention of the '70s and '80s excluded the true "ALL TIME" high, which is therefore "misinformation," if you really want me to split hairs.   Inflation was in fact at all time high of 23.70% in June of 1920.  But that was prior to even my birth, so I don't often dwell on that.  We tend to dwell on facts as they pertain to events that happened in our lifetimes.  And there's nothing wrong with that.

    Should Rogue01 have used words other than "all time"?  Perhaps, but everything is crystal in retrospect, right?  Fact is that too many younger people are overly sensitive and don't use their brains well.  They pop off at the slightest little insignificant thing.

    When Rogue01, posted what he did, I knew what he meant.  In 2022, inflation reached 8.5%, its highest rate since 1982.  So it was obvious to people like me, with our thinking cap firmly in place, that he was saying, "inflation is the highest it's been in a very long time."  It probably is the highest it's been in his lifetime (although not in mine, as I was born in 1971). Is that peak in 2022 an ALL TIME high?  Well, no, but that really does miss his point.  Again, this is why thinking caps are important.  

    People are too sensitive about writing the English language so perfectly that a blood sucking lawyer would get his kicks off it.  I personally, don't think humanity needs to go that far.  Besides, this is only a forum.  Any perceived "misinformation" isn't going to alter the course of the planet.  So when you see a T hasn't been crossed to your liking, or an "i" that hasn't been dotted, consider the friendlier approach of just saying nothing at all.  That's what prefer to do.
    muthuk_vanalingamh2pwilliamlondonFileMakerFeller
  • Reply 7 of 16
    danoxdanox Posts: 3,054member
    Apple is not doing anything they just have their finances in order, nor are they dooommmm…….
    Bart Y
  • Reply 8 of 16
    davidwdavidw Posts: 2,074member
    I'm trying to understand how moving from two bonuses a year to one bonus that is twice as big saves any money.... Apple earns an extra 6 months of interest on the spring bonuses? Maybe there is an accounting benefit to paying bonuses later in the year? Less paperwork? Employees forced to work in an office might quit before getting their bonus? I don't get it... This is hardly National Lampoon's Christmas Vacation...
    It probably depends on when the bonuses happen. If there are two then I would presume that one is at the six month period and the second is at the end of the year. So If Apple deferrers bonuses from June/July (halfway point) to December/January (end of year) they will pay the same amount but boost their finical numbers for what is a slower time of the year (June/July) and absorb the financial hit in what is the strongest part of the year. It's a shell game but will probably pacify investors?

    You must not be an AAPL investor. Nearly all AAPL investors knows that Apple fiscal year begins on Oct. 1 and ends on Sept.30 (of the next year). Oct is the beginning of  Apple first quarter (their Holiday quarter). So by delaying the April 2023 employees bonuses and combining it with the October 2023, they are essentially accounting for it in the next fiscal year of 2024. So for fiscal year 2023 (from Oct 2022 to Sept. 2023), they only ended up accounting for only one of the two bonuses they usually pay out. The one they paid out on Oct. 2022. But for the calendar year of 2022 and 2023, the employees received the same amount in bonuses. It's just going to be one payment in 2023 instead of two. Now if this stays the same, next year 2024 bonuses will be paid in Oct., which will be accounted for in the first quarter of Apple fiscal year 2025. 

    As an investor, what worries me is that if Apple is doing this so they only have to report 1/2 of the bonuses they paid out for fiscal 2023, I have to wonder how much are they paying in employees bonuses that it might adversely affect earnings or how bad of a fiscal year (2023) are they anticipating that they need to reduce operating expense everywhere possible?  Of course there might be other reasons for Apple to want to change the way they paid employees bonuses and they have nothing to do with fiscal 2023 earnings. 
    h2pFileMakerFeller
  • Reply 9 of 16
    xyzzy01xyzzy01 Posts: 135member
    I'm trying to understand how moving from two bonuses a year to one bonus that is twice as big saves any money.... Apple earns an extra 6 months of interest on the spring bonuses? Maybe there is an accounting benefit to paying bonuses later in the year? Less paperwork? Employees forced to work in an office might quit before getting their bonus? I don't get it... This is hardly National Lampoon's Christmas Vacation...
    I see two reasons - bonuses would be paid in what's typically Apple's best quarter (new iPhones, holidays) and some of the people that quit that year gets 0 bonus, instead of 1 of 2. There will always be turnover, so this adds up.
  • Reply 10 of 16
    dewmedewme Posts: 5,490member
    xyzzy01 said:
    I'm trying to understand how moving from two bonuses a year to one bonus that is twice as big saves any money.... Apple earns an extra 6 months of interest on the spring bonuses? Maybe there is an accounting benefit to paying bonuses later in the year? Less paperwork? Employees forced to work in an office might quit before getting their bonus? I don't get it... This is hardly National Lampoon's Christmas Vacation...
    I see two reasons - bonuses would be paid in what's typically Apple's best quarter (new iPhones, holidays) and some of the people that quit that year gets 0 bonus, instead of 1 of 2. There will always be turnover, so this adds up.
    You’re probably on to something but without insider knowledge about how Apple’s financial planning and reporting get done we don’t really know. All of the public companies I worked for were always doing little cost management tweaks, mostly related to limiting discretionary expenses like travel, around the end of fiscal quarters. These edicts filter down through the organization and the rationale for the changes is sometimes lost along the way, but I’m sure it absolutely makes sense fiscally if you really want to dig into the details.

    At a macro level this move by Apple tells us that they are being very proactive around managing expenses while maintaining their ability to execute at the levels they feel are necessary to meet their goals. Mass layoffs may bump up the stock price in the short term, but they usually degrade the company’s ability to execute in the longer term, at least in cases where the company was operating efficiently and effectively.

    I believe Tim Cook believes he has Apple operating efficiently and effectively so he doesn’t want to upset the balance or give up on growth. Contrast this with Twitter and Meta, whose “leaders” obviously feel that their companies are neither efficient nor effective so they jettisoned everything and everyone they see as unnecessary for survival. Growth isn’t even on the table for them at this point. Will their moves come back to haunt them? Twitter and Meta aren’t nearly as diversified as Apple when it comes products, services, and wide ranging innovation, so perhaps their Kamikaze-like moves will pay off in the long run. At the very least their negative growth and plunging value will open up opportunities for quarter-over-quarter and year-over-year improvements from what will be their new baselines. 
    FileMakerFellerBart Y
  • Reply 11 of 16
    lkrupplkrupp Posts: 10,557member
    The real explanation,, according to the real experts, is that tech companies hired like drunken sailors during the pandemic and expected the increase in activity to continue after it was over. It didn’t and now they are laying off the over-hires. At least Apple isn’t laying off...yet, just not hiring.
    FileMakerFeller
  • Reply 12 of 16
    mac_dogmac_dog Posts: 1,072member
    davidw said:
    As an investor, what worries me…
    As an investor in it for the long haul, I wouldn’t be too worried about this. That’s an emotional response that, when happens em masse, tends to impact share price negatively. Apple has done a great job and is in it for the long haul. Case in point, they don’t have mass layoffs. Nothing but a bunch of naysayers. Is it possible apple might actually give a shit about their employees? If even just a little? Stop worrying, stop checking the share price daily and start living your life. You only get one and you might as well enjoy it. Sheesh!!! The global money-centric mentality (gotta make more, bcoz there is never enough…) is killing society. 
    edited March 2023 dewmemuthuk_vanalingamFileMakerFellerBart Y
  • Reply 13 of 16
    davidw said:
    I'm trying to understand how moving from two bonuses a year to one bonus that is twice as big saves any money.... Apple earns an extra 6 months of interest on the spring bonuses? Maybe there is an accounting benefit to paying bonuses later in the year? Less paperwork? Employees forced to work in an office might quit before getting their bonus? I don't get it... This is hardly National Lampoon's Christmas Vacation...
    It probably depends on when the bonuses happen. If there are two then I would presume that one is at the six month period and the second is at the end of the year. So If Apple deferrers bonuses from June/July (halfway point) to December/January (end of year) they will pay the same amount but boost their finical numbers for what is a slower time of the year (June/July) and absorb the financial hit in what is the strongest part of the year. It's a shell game but will probably pacify investors?

    You must not be an AAPL investor. Nearly all AAPL investors knows that Apple fiscal year begins on Oct. 1 and ends on Sept.30 (of the next year). Oct is the beginning of  Apple first quarter (their Holiday quarter). So by delaying the April 2023 employees bonuses and combining it with the October 2023, they are essentially accounting for it in the next fiscal year of 2024. So for fiscal year 2023 (from Oct 2022 to Sept. 2023), they only ended up accounting for only one of the two bonuses they usually pay out. The one they paid out on Oct. 2022. But for the calendar year of 2022 and 2023, the employees received the same amount in bonuses. It's just going to be one payment in 2023 instead of two. Now if this stays the same, next year 2024 bonuses will be paid in Oct., which will be accounted for in the first quarter of Apple fiscal year 2025. 

    As an investor, what worries me is that if Apple is doing this so they only have to report 1/2 of the bonuses they paid out for fiscal 2023, I have to wonder how much are they paying in employees bonuses that it might adversely affect earnings or how bad of a fiscal year (2023) are they anticipating that they need to reduce operating expense everywhere possible?  Of course there might be other reasons for Apple to want to change the way they paid employees bonuses and they have nothing to do with fiscal 2023 earnings. 
    Totally aware of Apple's fiscal year, what I am not aware of is when Apple actually does bonuses. I used the calendar year because it was easier to do explain doing that, most people tend to think of the year as Jan - Dec not Oct - Sept. In the end we are describing the same thing, moving bonuses for the purposes of bolstering financials. 

    I'm also randomly speculating and retrospect I doubt Apple pays enough in bonuses to have a tremendous impact on the quarter. My guess is they are moving them for some other reason. 

  • Reply 14 of 16
    macxpressmacxpress Posts: 5,849member
    Rogue01 said:
    macxpress said:
    I fail to see how taking a company like Apple which has record profits doesn't just keep going status quo. It's not like they cannot afford it. I'm glad Apple isn't following suit and being ridiculous in laying people off because they "think" a recession is coming at some point but it would be nice to see them just not putting extra profits over keeping employees happy. 
    The recession is looming.  Inflation at an all time high.  And even Apple's operating costs have increased because water, power, natural gas, have all gone up in price.  Apple is laying people off through attrition.  They are not replacing people that leave.  Same as laying people off because they redistribute the work to others and have them take on more work.  They just did that when a VP of Design left and those duties are now passed on to someone else and the position not being replaced or filled.  So that makes them 'look good' by not publicly announcing layoffs, but the people have to take on more work for the same pay because Apple won't fill the now vacant position.  They just eliminate it instead.
    Well yes eventually they will be right about a recession, but shit that could be 2yrs from now. But yeah they were right lol! The economy is still very strong, jobs are up, and spending it up. That's not really a sign of a recession. Honestly, I think a recession is something that is being fabricated by certain companies. It's like rushing someone in a medevac to the ER for a paper cut. 
  • Reply 15 of 16
    9secondkox29secondkox2 Posts: 2,853member
    Apple got ahead of this mess over a year and a half ago. 

    They saw it coming as good management does. Funny how the other guys didn’t do their due diligence and now are laying off people in the tens of thousands. 

    Meta is a glaring example, hiring msny to build a dream that had no legs, only for it to inevitably fail. 

    Thankfully Apple has been one to take the slow and steady approach, committing only when the business plan fully vetted (most of the time). 

    The economy hasn’t really changed. People are still making stuff. People are still buying stuff. But we have a bunch of people doing neither trying to mess it all up by putting their grimy hands in the cookie jar. 
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