Jobs Axes Sabbaticals, Big Bonuses Apple Boss Outlines Steps For Bringing Down Costs

Apple Computer co-founder Steve Jobs, calling on the company’s “egalitarian, entrepreneurial” heritage, is axing sabbaticals, ending cash bonuses for executives and cutting severance pay.

Jobs, who has become Apple’s de facto leader, announced the changes in an electronic mail memo to employees on Tuesday.

The memo, signed “Steve and the Executive Team,” also calls for more modest travel arrangements and continued consolidation of employees.

The message, reported by newspapers and online publications, is the latest evidence that Jobs is essentially running the company he co-founded 21 years ago - despite his refusal of the chairman and chief executive officer’s posts.

Apple, based in Cupertino, Calif., has been struggling against stubborn financial losses, disappointing sales and eroding market share. Last month, the board of directors ousted chairman and CEO Gil Amelio, and last week Apple replaced most of its board and announced an alliance with Microsoft Corp.

“Today we are taking a few more steps which will begin to take Apple back to its roots as a more egalitarian, entrepreneurial company,” Jobs said in his memo.

Apple, he announced, is eliminating cash bonuses for executives, replacing them with stock options. The company also is reducing severance pay to one week of salary for every year worked at Apple from one month of pay for every year worked. Employees still get a 60-day notice with full pay and benefits.

In addition, Apple is now requiring all employees to fly coach on trips shorter than 10 hours and business class for longer trips. Employees can pay for their own upgrades or use mileage awards.

The company, starting in October, is eliminating sabbaticals, a perk it adopted early on and a popular benefit with employees.

“Apple needs all hands on deck for the foreseeable future as we turn our company’s fortunes around,” Jobs said.