Apple's stingy employee discount

Apple's stingy employee discount

Summary: Instead of $83 off an iPad, Apple could have given each employee a solid gold iPad -- worth around $36,000 -- and barely made a dent into profits. Or maybe a brand new 2012 Mercedes Benz C-class perhaps?

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TOPICS: Apple, Banking
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How's this for an employee incentive: a solid gold iPad! by Jason O'Grady

Apple announced record earnings again last quarter, surpassing all previous records and making Apple the envy of technology companies and Wall Street. Although $AAPL's reported revenue topped $100 billion (yes, with a 'b') for the year, it continues to stiff its employees.

Exhibit A comes from CEO Tim Cook's town hall meeting with his rank and file employees yesterday. Word leaked out that Apple will be offering a new discount to its employees.

So far, so good. Everyone likes a good discount.

According to 9to5Mac, Cook told employees that Apple would be offering employees a new discount of $500 off a Mac and $250 off an iPad.

Sounds good, right?

(I have to confess to immediately flipping through my mental Rolodex to the letter A as I started thinking about contacts I could reach out to about the discount.)

The problem is that Cook's "discount" is a charade that amount to nothing more than a soundbite.

For starters, the deal -- as told by 9to5 -- comes with a lot of strings attached:

  1. It's for full-time employees only -- No surprises there, contractors are usually commoditized at most big employers.
  2. You have to have worked at Apple for at least 90 days -- This is the "bozo clause" that eliminates the incentive to get a job at Apple, you know, just for the $500 off.
  3. The program begins in June -- Typical corporate bureaucracy in full effect.
  4. The Mac mini isn't included -- No $99 Mac for you!
  5. Employees can only take advantage once every three years -- This was the impetus for this post and is offensive on several levels.

So, when you weight all the heavy prerequisites above and factor in the three-year clause, the employee nets a $166 discount per year for a Mac or a $83 discount per year for an iPad.

$166 or $83!

Geez. Apple could have at least made it annual.

Odds are that the employee's discounted MacBook Air or iPad will be in a landfill (or hopefully recycled) by the time they're eligible again for the discount. Some incentive.

(If it were closer to the holidays I'd be tempted to photoshop Cook's head onto the body of The Grinch.)

Did I mention that Apple earned an average of $400,000 in profit per employee last year?

"For that, dear employees, I will grant you a $166 discount on a Mac -- just not a Mac mini."

Here's a thought: how about a dividend.

Photo: IntoMobile

Topics: Apple, Banking

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115 comments
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  • RE: Apple's stingy employee discount

    I'm guessing they're also not taking a loss on any of the devices they sell to employees with those discounts. They're just not getting as much profit.

    But I'm sure there are other benefits...
    Badgered
    • RE: Apple's stingy employee discount

      Except for number 4 which is odd every option there seems fair. To expect a company to offer a discount regularly is being unfair.

      Maybe 3 years is a bit stiff but I though Macs were supposed to last for years? I keep my Windows PCs 4-5 years on average, they get upgrades but it's the same PC.

      "So, when you weight all the heavy prerequisites above and factor in the three-year clause, the employee nets a $166 discount per year for a Mac or a $83 discount per year for an iPad."

      That's a ridiculous way to look at it. It's a $500 off a Mac and $250 off an iPad discount.
      bradavon
      • RE: Apple's stingy employee discount

        @bradavon you have to work for Apple right? Come on.
        tessab13
      • RE: Apple's stingy employee discount

        @bradavon

        The reason the every three year discount is stingy is because the point of a discount is so not only you can get it, but also your spouse, and immediate family. With the once every three year policy you cannot let your family benefit also, which with most discounts of this type is allowed at large cos. I mean even Wal-Mart does this an employee and their immediate family get a 10% discount on all purchases with no limit. Apple is just being cheap. I think 4 and 5 are pretty lame for a co. like Apple. But hey that's just Apple being Apple and I cannot say I am surprised. I mean come on Jobs was ready to disown one of his own kids. His low class attitude probably spread like a virus to the other execs and it is showing.

        One of his dying wishes was probably to scr3w the employees.
        alphaxi3
    • RE: Apple's stingy employee discount

      @Badgered Theres probably tax implications for employees too that make it hard for Apple to simply give away stuff or make a loss on stuff. Imagine getting a gift from apple and then having to pay $400 in fringe benefit tax at the end of the financial year.
      global.philosopher
      • True

        @global.philosopher
        When we opened the Apple Store I worked at I won a raffle for a new iBook laptop. The IRS calls that a "bonus" and I had to pay income tax (State and Federal) on the full retail value of the laptop (about $1100).
        use_what_works_4_U
      • RE: Apple's stingy employee discount

        @global.philosopher
        There are no tax implications. It is not a gift; it is a transaction. It is the same as any other discount you would give to a company or group of people.
        MichaelWells
    • Yeah.. Jason is being an ignorant tool...

      @Badgered

      That 500.00/250.00 is after an employee discount with happens to be 25%... And lets not forget medical, dental, 401K, employee stock, etc...

      But Jason seems to think that this 500.00/250.00 is the only perk Apple employees get... A wee bit obtuse, eh Jason?
      i8thecat4
  • RE: Apple's stingy employee discount

    So, "Workers of the (Apple) world unite!"? As an Apple stockholder, entrepreneur and fervent capitalist your rant sounds like maybe Mr. Cook is being too generous.
    dheady@...
    • RE: Apple's stingy employee discount

      @dheady@... <br>[i]So, "Workers of the (Apple) world unite!"?[/i]<br><br>No, that would actually be more apropos to the Red Chinese they employ by the hundreds of thousands, instead of American workers like they once did. Modern day sweatshop labor never looked so good. <br><br>That's so they can go from insane profits stateside to obscene ones overseas.
      klumper
      • RE: Apple's stingy employee discount

        @klumper Do you really think the workers are 'red' Chinese? Besides, read the NYTimes ( can't believe I'm referencing that rag) article. The US doesn't have the engineers.
        dheady@...
      • Of course the USA doesn't have the brainpower any longer

        @dheady
        [i]Do you really think the workers are 'red' Chinese? Besides, read the NYTimes (can't believe I'm referencing that rag) article. The US doesn't have the engineers.[/i]

        Well Foxconn City is part of mainland China, as opposed to Taiwan island and Cupertino where the big mucks are, isn't it? Mainland China is communist and Red, isn't it? So how are these workers not Red Chinese? Hundreds of thousands of them to boot, conveniently supplanting American workers in our own obscenely profitable "American" corporations.

        Only the profits aren't really spreading far at this point. Forget all the "trickle down" BS theories. We're getting a rape and snow job instead.

        Naturally we can always count on one excuse after another from the one-world elite (not referring to you David). Only this country wasn't built on predatory capitalism, but on free enterprise where we always took care of our own first! Apple started this way, as did every other American business, before they sold out the nation -- and US workers in particular.

        Ditto re the engineering pool. During our entire history we not only had enough to start cutting edge companies, but to cover the bases thereafter. Businesses knew how to cultivate what they needed using homegrown resources and training incentive programs. Then as it became expeditious *AND CHEAPER* to import scab labor (blue collar) and scab engineers (gray collars), and export everything else via offshoring, the white collars in charge leapt with both feet first while the Feds sucked their thumbs and "conveniently" looked away.

        THERE WAS ENDLESS JACK TO BE MADE EXPLOITING FOREIGN WORKERS! And more money to shovel into private pockets. The floodgates were opened, every corpoRAT worth his hide jumped in, lest he be left behind. This potion has now become a poison to the country's collective + long term health. It's that simple. We're also exporting away the very BASES of these industries -- forever!

        All this was done with blessings from their business school advisers and venture capital financiers! The tech press mostly applauded along like seals.

        Bringing in a [i]limited[/i] percentage of engineers as a buttress has never raised flags per se. But the LCD mentality to replace all but the top ivory collars with cheaper mercenaries is to be found everywhere at this point by those running the USA, flowing unchecked. And worse yet, the coders + scripters you speak of are foreign GOVT subsidized and educated, while ours inherit MEGA DEBT. The resultant and inherently uneven playing field only adds insult to injury.

        Net result = America continues to sink! Do you really believe this is simply a cyclical trend, as opposed to a systemic modus operandi at this point? *Think*//*
        klumper
  • you seem to forget that

    apple also offers a 25% discount on a new system every year. Which is why the mac mini is excluded since that would result in a total of about -$50 (yes that's a negative) before taxes.
    bvirga0218@...
    • RE: Apple's stingy employee discount

      @bvirga0218@...
      You might want to re-check your math on that one.
      kstap
      • RE: Apple's stingy employee discount

        @kris_stapley@...
        The math seems correct, based on a $599 mac mini (note this does not include tax) - $599 * (1.0-.25=).75 -$500=-$50.75 + tax (for me that would be about $43 based on the $599 price for a net -$7.75).

        At one time I got a discount for being a developer and a supplier (of CAD software). I don't remember the percentage, but what I do remember is it only applied to high margin items like the macbook pro and generally I could find them as cheap from resellers.
        Clewin
  • RE: Apple's stingy employee discount

    I usually have my Mac for 5 years but 3 years is just right.

    If it were a PC I could see your problem.
    studentrights
    • I disagree. PC's last just as long

      @studentrights

      and cost far less to repair should something happen then an Apple does to repair.

      This is really an issue if you own an Apple product, since it will die before 3 years.
      William Farrel
      • Yeah, right

        @William Farrel
        Nice troll. Every Mac I've owned since 1984 has lasted no less than 3 years and as much as 10+. I think the average is about 7 years of true usability.
        use_what_works_4_U
      • RE: Apple's stingy employee discount

        @macadam

        Well, if I'm being completely honest... I get about 5 years (on average) out of my home PCs (built by me). Of course, I could have bought 2 of them for the equivalent Mac. Considering the parts that on occasion I replace or upgrade, it comes out to be about the same as your experience.
        Badgered
      • RE: Apple's stingy employee discount

        @Badgered
        Yup, that sounds about like what I would expect. My comment wasn't meant to imply that Macs last unusually long (a computer is basically a computer on that regard unless you really cheap out on the parts you start with). I was just saying that William Farrel's "will die before 3 years" is ridiculous on its face, no matter who made your computer.
        use_what_works_4_U