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Apple cuts hiring and bonuses as revenues decline, but avoids layoffs

Apple is cutting costs in an effort to “streamline operations in uncertain times,” according to a new report. The company is reducing the frequency of some employee awards, limiting hiring and electing not to replace some employees who have left.

Bloomberg Journalist Mark Gurman, citing “individuals with knowledge of the situation … (who) have asked not to be identified because the plan has not been publicly announced,” writes that a belt-tightening operation began in response last July to rising inflation and fears of recession, but which is now widening and deepening. Not without reason – Apple’s revenues were down 5% year over year during the holiday period amid iPhone manufacturing issues and demand for soft Macs, and is expected to be down again in the current period.

“We’re very cautious and budget conscious,” CEO Tim Cook said at a shareholder meeting last week, “and we continue to be very cautious when it comes to hiring.”

Gurman notes that cost-cutting measures in Cupertino have included a reduction in travel budgets, increased supervision of executive spending, and some layoffs of contract workers; even Cook himself has took a pay cut. But it’s worth pointing out that Apple has generally avoided the severe cuts seen in other tech companies: like Macalope reported earlier this year, Google, Microsoft, Amazon, Facebook, Spotify and many other tech giants recently resorted to mass layoffs.

Part of that may be due to Cook’s cautious tendencies as CEO: Apple rarely stretches as far as rivals during sales booms, meaning less need to scale during lean times. But it’s also fair to say that “lean times” is a relative term. During that seemingly disappointing quarterly report, Apple noted that its services division alone, large enough to be a top-tier Fortune 500 company, crossed the $20 billion mark in revenue for the first time. (Intel as a whole earned $14 billion in its most recent quarter; Netflix earned less than $8 billion.) The iPad division was up 30%, and the company was still hugely profitable.

So while Apple is clearly taking things seriously, it would be a mistake to think the company is in trouble.