Apple offices in Sichuan, China. (Photo: Unsplash)
Dismissal as a last resort
The CEO of Apple, Tim Cook, has defined layoffs as a 'last resort' and is actively working to avoid getting there. One of the steps he took was to reduce his salary and it is quite a cut. At the beginning of the year, Cook announced a voluntary cut in his salary of 50% for this year, At a value of 49 million dollars. That is, the CEO, as the supreme person responsible for the company's results, announced the lowering of his salary as a step of recognizing the company's situation and mobilizing to help.
In the other companies, such as Alphabet or Meta, the CEOs may have taken responsibility for the managerial mistakes that contributed to the current waves of layoffs, but we have not heard of them volunteering to cut their salary or their compensation package as a measure of taking responsibility. This step is significant for another reason, if in the end There will be no choice but to fire employees, there will be an understanding among the employees, the fired and those remaining in the company, that the management really made every effort not to get fired, which were really the last resort to save the company.
Do not exaggerate recruitments
Another step is related to the recruitment policy.
While Silicon Valley has had a pretty crazy increase in hiring, Apple has grown its headcount at a relatively slow pace, keeping more or less the same hiring rate since 2016, according to Forbes.
In doing so, she saved a large addition to the company's fixed expenses.
Moreover, it is clear that if the company does not have an excess of employees, then it does not have to fire either, because it has many other ways to become more efficient.
To explain the matter, Amazon announced at the end of 2022 its intention to lay off 27,000 workers in a process that is expected to spread over 2023, this after in 2021 it recruited no less than half a million workers and reached one million workers, becoming the second largest employer in the United States after Walmart.
A year later, the company expanded its workforce by 310,000.
Before its layoff announcement, Amazon reportedly employed 1.5 million people, including corporate and warehouse staff.
Apple, on the other hand, added less than 7,000 jobs in 2020, and in September 2022 it was reported that the company employed 164,000 full-time workers.
Calculate the expenses
The current period is not a period for extravagant spending.
This means that you can lower the expenses on events, vacations, training days, food deliveries and treats in the refrigerators.
It is likely that most employees would rather have a smaller budget for treats than lose their job.
In this matter too, Apple behaves a little differently.
The company has always been relatively conservative when it comes to employee benefits and treats, and yet, you can be sure that no one there is hungry for bread.
In addition, Apple is working to lower its expenses.
As part of the measures taken, Apple is delaying the payment of bonuses to some teams and freezing recruitment in many divisions.
One of the changes adopted by the company is a change in the payment date of bonuses to some employees - a step that will mainly affect the operations and retail divisions.
Until now, Apple distributed bonuses and promotions once or twice a year, depending on the divisions.
However, as part of the new plan, no bonuses will be distributed next month, no promotions will be announced, and all divisions will receive a one-year bonus only - in October.
All these measures are designed to reduce the current expenses of the company, is it possible to compensate the employees for this in some way?
One way to reward employees when they want to save on expenses is to give them options - if this is relevant to that company.
Options are a reward that does not harm the company's cash flow, but dilutes the shareholders' holdings.
In addition, it is very useful for employees to receive the options when the value of the stock is low, for example when the startup is in its infancy or when the company loses its value, as has happened to many in recent months.
When the company recovers and its stock soars, they will make a significant profit.
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Although the total value of Apple is greater than 90% of the world's countries, it is a company that has for years been careful about prudent economic conduct.
Conservatism in spending has always proven itself in difficult times, while extravagance almost always results in painful concessions when the ship rocks.
Such periods are an opportunity to re-examine the expenses of the organization, as well as the set of roles in the organization and the efficiency of the various units in the organization and to ask ourselves are they all really necessary?
Could they have been arranged differently?
And what else can be done to cut expenses when layoffs are a last resort?
Avi Nir is the founder and CEO of Compvision
Marketing and digital