Apple admits error and reverses store-staffing changes
A staffing stumble byApple Inc.'s new head of retail stores has led the company to issue a rare apology and backtrack on cutting workers’ hours.
The mea culpa came after widespread speculation arose that the technology stalwart, known for its sleek retail stores and eager employees, had laid off or severely cut the hours of some workers as part of a new store staffing plan put in place by John Browett, who became Apple’s senior vice president of retail in April.
“We recently implemented some changes in retail staffing. Making these changes was a mistake, and the changes are being reversed,” Apple spokeswoman Kristin Huguet said Thursday. “Our employees are our most important asset and the ones who provide the world-class service our customers deserve.”
Huguet declined to elaborate on what the problematic retail staffing changes had been. Although no sweeping layoffs have been confirmed, some workers’ hours were reportedly reduced and hiring slowed.
“I would call it an unfortunate and surprising misstep,” said Shaw Wu, an analyst at Sterne Agee. “But even well-run companies make mistakes.”
Before Apple, Browett was chief executive of Dixons Retail, a European technology retailer. Dixons stores are reminiscent of U.S. chains Best Buy and Fry’s Electronics: lots of square footage, row upon row of shelves packed with products and, frequently, bright primary-color schemes.
Meanwhile, Apple’s stores are heralded for their clean, spacious design and minimalist architecture. In the retail industry, Apple is considered a shining example of how to sell merchandise and appeal to shoppers. Much of that success has been the result of having the right mix of knowledgeable employees who are widely available but not overly pushy, analysts said.
As a result, the Cupertino, Calif., company’s stores generate more than $5,000 in sales per square foot, among the highest in the industry, according to a research note by Aaron Rakers at Stifel Nicolaus & Co.
“That’s multiples higher than what we’ve seen at other retail players,” he said. “They out-execute anyone.”
The apparent contrast between the Dixons aesthetic and Apple’s stores led some observers to wonder whether Browett’s approach might clash with Apple’s.
The reports that Apple was cutting worker hours were especially puzzling given the company is expected to announce a new iPhone next month and possibly a mini iPad. The stores typically increase employee hours during product launches, as Apple aficionados camp out overnight to be the first in line and bombard staffers with questions.
Wu speculated that Browett came in with a new vision in mind that didn’t work. The executive also had the unenviable task of taking over for Ron Johnson, the previous head of Apple retail who pioneered the look and feel of the company’s stores before leaving to become chief executive ofJ.C. Penney Co.in November.
“Frankly it’s tough shoes to fill,” Wu said. “It’s too early to judge, but this is definitely an unfortunate surprise. On the flip side, it’s good they’re fixing it.”
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