Microsoft recently announced something rather interesting – a voluntary employee buyout. In short, if your age and tenure at the company add up to 70 or greater, you’re able to voluntarily leave the company, retire early, and receive a (likely) hefty payout.
It’s a less hostile form of layoffs, and while I don’t think Apple would implement it for the same reasons as Microsoft, I think it could serve a unique purpose for transforming the company.
Why Apple should do it
In all likelihood, Microsoft’s buyout is purely a means for reducing headcount without having to look too bad. During covid, essentially every tech company rushed to hire loads of people because of the growth in the tech sector. Then, that growth slowed down, and we’ve now been in this post layoff environment for the past 3-4 years.
Apple largely avoided over-hiring, and they’ve for the most part avoided mass layoffs. Now, the flip side of that equation is the fact that Apple has been hiring extremely slowly – because they don’t want to over-hire. This means that in recent years, Apple has been slow to bring on fresh talent, while having tons of senior talent who aren’t always enthusiastic per se.
Those employees aren’t leaving because they aren’t at retirement age – and they’re still reliant on their Apple stock compensation grants, so they stay at the company doing the bare minimum. This is known as resting and vesting.
The ‘rest and vest’ problem
Big tech employees do get paid hefty salaries, but they also receive stock grants that vest over a period of time, typically 4 years. You’ll also get additional grants over time depending on performance, which makes it a continual cycle of having to stay at the company to receive your full compensation.
It’s a great system for aligning employees with the growth of the company, and also making sure you retain your talent. The issue with this is that once you’re senior enough, you often get to a point where you can coast and get away with it. You could argue that people don’t have to work as hard once they’ve been at the company for 5-10+ years, but when you’re not hiring as much new talent, it creates a problem where things don’t necessarily get done in the manner that they should. That’s incredibly visible in Apple’s software quality.
You could also argue that Apple should just open up its wallet more and hire more people without having to think about its current senior talent. That’s definitely a very valid argument, but given the CEO change, I think it’d be smart regardless to give senior talent the option to retire early if they’d like to. Apple’s always been conservative when it comes to big spending, so I wouldn’t expect a big hiring spree to happen all of a sudden.
How it could work
Microsoft’s buyout requires your total age and tenure to be greater than or equal to 70. Apple could straight up copy this, or they could be even more aggressive: 60. If you’ve been at Apple for say, 15 years, you’re 45 years old, and you want an easy way out – you can take it.
There’d definitely need to be a phased approach to prevent tons of talent churn at once. Regardless though, with a new era of leadership – I think getting some fresh blood into the company, and allowing those who don’t truly want to be there to have an early retirement, would be a great premise for the future of Apple.
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