Here's What Apple Is Doing To Avoid Massive Layoffs

Apple is resorting to drastic cost-cutting measures to avoid massive layoffs amid the tech industry slowdown.

Bloomberg tech reporter Mark Gurman noted that Apple would find it more difficult to justify a mass layoff compared to other tech giants like Meta, Amazon, Microsoft and Google parent Alphabet considering that the iPhone maker is "far more profitable than any other tech company." Apple's top executives are likely aware of the damage mass layoffs would inflict on company morale and public perception, according to Gurman.

To contain costs and keep its workforce intact amid economic uncertainty, Apple has paused hiring for many positions outside of research and development, such as corporate functions and standard hardware and software engineering roles.

The tech company said in a November 2022 statement that it was taking a "very deliberate approach in some parts of the business," given the challenging economic environment.

"We want to be thoughtful and make smart decisions that enable us to continue fueling innovation for the long term," Apple said.

However, some Apple teams could still hire people under special circumstances, unnamed sources told Bloomberg.

In addition to its hiring freeze, Apple keeps the roles of people who leave the company open rather than filling them as well as limits the ability of its employees to transfer to other departments or stores to avoid further costs.

In August 2022, the company laid off about 100 contract-based recruiters as part of its efforts to slow down on hiring and cut spending. However, it didn't affect recruiters who are full-time workers at Apple.

Apple's managers have also become stricter about office attendance for workers expected to come in every Tuesday, Wednesday and Thursday. The move fueled concerns that employees who don't meet the requirement might be fired.

Apple has also been scrutinizing the hours worked and the attendance of its retail workers. Several retail employees revealed that, in some cases, the company is not replacing the hours of those who called in sick or are absent for other reasons, according to Bloomberg.

The tech giant reportedly got rid of "special sick time" for staffers who were infected with COVID-19, advising its workers to instead use normal sick time or not get paid.

Aside from hitting the brakes on its hiring process and implementing strict attendance monitoring, Apple also launched initiatives to avoid accumulating unnecessary costs.

Apple decided to provide bonuses to some of its corporate teams once a year or every October, a departure from biannual bonuses.

The launch of new projects, including new home devices, was pushed back to next year to allocate funds to more pressing projects.

In addition, Apple reduced travel budgets and now requires its employees to secure approval from senior executives.

Despite its cost-cutting measures being seen as harsh, Apple entered the new year with no announcement of a workforce reduction.

Apple also managed to keep its operating expenses during the first quarter of its 2023 fiscal year well below the company's guidance. According to Apple's latest condensed consolidated statements for operations, it recorded $14.3 billion in total operating expenses.

Apple CFO Luca Maestri applauded their strategy following the release of the company's holiday quarter report last month.

"We're doing a lot of work on the cost structure and that is paying off," Maestri said, CNBC reported.