APPLE is delaying bonuses for some corporate divisions and expanding a cost-cutting effort, joining Silicon Valley peers in trying to streamline operations during uncertain times, said people with knowledge of the situation.

The shift will reduce the frequency of bonuses for a portion of Apple’s corporate workforce, said the sources, who asked not to be identified because the plan has not been announced publicly. Separately, the company is freezing hiring for more jobs and leaving additional positions open when employees depart.

In the past, Apple typically doled out bonuses and promotions once or twice per year depending on the division. The twice-a-year teams usually saw that happen in April and October. Under the new plan, that group will not see bonuses or promotions next month, and all divisions will move to an annual schedule – with the payments occurring only in October.

The majority of Apple’s divisions had already moved to a once-a-year schedule for bonuses and promotions, including software engineering and services, but staff in operations, corporate retail and other groups had still been on the outgoing biannual plan.

Apple, the world’s most valuable company, began a belt-tightening effort last July, when galloping inflation and recession fears spurred it to take a more cautious stance. The iPhone maker has avoided the kind of mass layoffs underway at most of its tech peers, but it has reduced budgets, cut headcount goals and frozen hiring across several divisions.

Employees are still slated to receive their full bonuses, just in one instalment rather than two. Even so, the change could come as a blow to staff, especially because Apple has not provided much advance notice in some cases. Workers often count on such bonuses for their personal budgeting. The move could also potentially help retain employees who may have planned to leave the company after receiving the April payout.

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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. A spokesperson for the Cupertino, California-based company declined to comment.

Apple is facing a sales slowdown, adding pressure to keep its operations lean. Revenue declined 5 per cent during the holiday quarter, a steeper drop than Wall Street projected, hurt by iPhone production snags and sluggish demand for Macs and wearable devices.

Sales are expected to fall by a similar amount in the current period.

During Apple’s shareholder meeting last week, chief executive officer (CEO) Tim Cook said the company continues to be especially careful with money.

“We’re being very prudent and thoughtful on spending and we continue to be very deliberate when it comes to hiring,” he told shareholders. Operating expenses during the holiday quarter came in below guidance and grew more slowly than in the past, Cook noted. Still, he added that Apple continues to “invest in innovation”.

As part of this more cautious approach to spending, Apple has reined in travel budgets and is now requiring senior vice-president approval – the highest executive level at the company below the CEO and operating chief – for more budget items. It also has laid off some contract workers across the company.

Still, Apple employees have generally been in a less precarious position than those at other big Silicon Valley companies, such as Meta Platforms and Alphabet’s Google, which have undergone deep cuts. Apple has been able to avoid layoffs in part because it was more measured in its hiring and spending during the pandemic.

As part of the moves, Cook is taking a pay cut himself. In January, Apple announced that his compensation for 2023 would fall by more than 40 per cent to about US$49 million. Shareholders approved executive pay packages at Apple’s annual meeting last Friday (Mar 10).

In addition to trimming costs, Apple’s human resources department has been taking a closer look at how often employees come to the office. The company’s current policy requires employees to work from an Apple building three times per week – a policy that was contentious when imposed last year. Some staffers are now worried that the increased scrutiny on office attendance is a precursor to the company firing workers who do not meet the three-days-a-week threshold.

The concerns have spread to Apple’s retail staff. Several of those employees said that stores are increasingly scrutinising hours worked and attendance. And some part-time retail employees have said they feel like they are being encouraged to quit by being asked to work more hours and days than they agreed to when they were hired. BLOOMBERG