As the tech sector continues to weather economic headwinds, Apple has reportedly decided to slow down its hiring efforts and postpone handing out promotions and bonuses to existing staff.
The world’s most valuable company is also reportedly keeping a close eye on travel spending and office attendance, as part of an effort to be more “prudent and thoughtful on spending”.
Unlike Meta, which has just announced 10,000 more job cuts, these actions have been taken to reduce how many workers the company let go. However, as demands for certain Apple products slump, it’s uncertain whether Apple will be able to avoid layoffs further down the line.
Apple Extends Hiring Freeze and Delays Payouts For Existing Staff
Apple has announced a series of cost-cutting measures to remain economically viable, as tech stocks continue to tumble and the industry deals with one of its biggest downturns in years.
According to sources in Bloomberg, one of Apple’s major belt-tightening measures involves extending its hiring freeze, which was first implemented back in 2022. This temporary pause on recruiting will now apply to other areas of the company and will suspend hiring for new roles as well as keep vacancies open when workers choose to leave.
Aside from hiring adjournments, Apple is also postponing handing out gratuity to its existing employees. Specifically, the iPhone manufacturer has decided to push back issuing bonuses and promotions from April to October in most corporate divisions, changing it from a bi-annual to an annual practice.
“We’re being very prudent and thoughtful on spending, and we continue to be very deliberate when it comes to hiring.” – Tim Cook, Apple’s CEO
As part of Apple’s CEO Tim Cooks’ vision to be more prudent and thoughtful when it comes to spending, he’s also requiring the company’s senior vice president to sign off on all travel budgets and is doubling down on the company’s three-day-a-week mandate by scrutinizing office attendance.
But changes aren’t just affecting current and prospective staff members. In January of this year, Tim Cook himself requested a pay cut of 40% this year, reducing his annual total compensation to $49 million.
How Long Can Apple Avoid Making Cuts?
As the tech industry continues to be squeezed by escalating inflation rates and the aftermath of the pandemic boom, major firms – from Google to Amazon – have been forced to axe headcounts to remain buoyant.
Yet, as layoffs in the sector exceed 130,000 so far Apple has been able to curb the trend, in part due to its ability to successfully drive up efficiency and productivity and in part due to its profitable business model, which has allowed it to secure a smartphone market share of 48%.
However, even as Apple’s net worth exceeds an eye-watering $3 trillion, solidifying its position as the world’s most valuable company, it may not be able to avoid layoffs forever.
According to Fortune, despite relatively healthy forecasts, Apple’s revenue declined by 5% over the holiday quarter as demands for Macs and wearable devices wave. As a result, Apple decided was forced to cut a large number of contractors last month, marking its second round of layoffs of temporary staff in less than a year.
By cutting back costs where possible, there’s no debate that Apple is making a noble effort to retain its permanent staff. However, as the company continues to contend with the same roadblocks as the rest of the industry, there’s no guarantee on how long this will last.