The year 2024 has seen some eye-popping contrasts in the tech industry. While Tesla Inc TSLA is leading massive layoffs, cutting 14% of its workforce, other tech giants such as Apple Inc AAPL and Alphabet Inc GOOG GOOGL are busy bumping up executive salaries by millions.
Let’s start with Tesla. The electric vehicle pioneer has slashed 14,500 jobs, a 14% reduction in its workforce. CEO Elon Musk cited inefficiencies as the reason behind the cuts, though plans to reinstitute stock options for exceptional performance were also mentioned.
But Tesla isn’t alone — other big names in tech are trimming their workforce too, including Dell Technologies Inc DELL, Cisco Systems Inc CSCO and PayPal Holdings Inc PYPL.
More Details: Tesla Leads 2024 US Tech Layoffs So Far, Followed By Dell, Cisco, Xerox, PayPal, Microsoft
While Tesla and its peers are tightening their belts, Apple Inc AAPL and Alphabet Inc GOOG GOOGL are going in the opposite direction. They’ve been handing out hefty raises to their top executives. CFOs at these tech giants have seen their compensation packages balloon, thanks to generous stock-based incentives, as reported by WSJ.
This surge in pay is largely driven by stock awards and options, reflecting a strategy to retain top talent amid economic uncertainties.
This stark contrast between layoffs and executive pay raises underscores the growing divide in the tech industry. While thousands of employees face job insecurity, top executives are enjoying substantial financial rewards.
Apple’s Luca Maestri and Alphabet’s Ruth Porat are among the highest-paid CFOs. Their pay hikes are part of a broader trend where median CFO compensation at top U.S. companies rose by 8.5% in 2023.
Apple’s CFO saw a significant boost in compensation thanks to a surge in stock awards, reflecting the company’s strong market position.
Porat saw her compensation package swell, driven by similar stock-based incentives. This trend of rewarding top executives handsomely, even as other parts of the company face cuts, is drawing increased attention and scrutiny from investors and employees.
It’s not just Apple and Alphabet. Other tech giants like Zoom Video Communications Inc ZM, Walmart Inc WMT and Advanced Micro Devices Inc AMD have also increased executive pay significantly.
- Zoom’s CFO Kelly Steckelberg saw a staggering rise in her compensation due to substantial stock awards, making her one of the highest-paid executives in the industry.
- Walmart’s CFO John David Rainey received a considerable pay package tied to his joining bonus and stock awards, reflecting the company’s efforts to attract top talent.
- Similarly, AMD’s Jean Hu received a notable boost in her pay, highlighting the broader trend of rewarding executives handsomely despite economic uncertainties.
As 2024 progresses, the tech industry’s approach to managing its workforce and rewarding its executives will continue to evolve.
Companies like Apple and Alphabet, which are increasing executive pay amidst a wave of industry layoffs, highlight the ongoing challenges and disparities within the sector.
Read Next: ‘Stock Market Has A Bad Breadth Problem Again,’ Veteran Wall Street Investor Warns
Photo: Shutterstock