Report: Apple cuts retail store budgets, refocuses on profits | iLounge News

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Report: Apple cuts retail store budgets, refocuses on profits

Retail policy changes and cutbacks at Apple Stores are quietly continuing, according to a new report from ifoAppleStore, placing more emphasis on revenues and profit over customer satisfaction. The report claims that Apple has cut back in several budgetary categories, while decreasing hours for many employees, and instituted sales-focused performance metrics that threaten to further undermine morale within the retail division.

Last month, Apple Senior VP of Retail John Browett reportedly instituted a number of new staffing policies, including reducing hours, laying off new, probationary employees, and limiting overtime, leading to outcry from retail employees. According to a subsequent follow-up in The Wall Street Journal, Browett later reversed these changes and denied that any employees had been laid off, however, ifoAppleStore’s sources disagreed with at least some of these claims, indicating that layoffs had in fact occurred, and that affected employees were later rehired.

This more recent spate of changes within Apple Retail involve a reduction in workshops at many stores, continuing limits on available overtime hours, and assigning of only minimal hours to part-time employees. Further, new employee performance measurements emphasize contract sales of iPhones, as well as the number of accessories such as cases that are sold alongside major products. Additionally, the report indicates that employees are being told to promote use of the EasyPay app, despite the fact that EasyPay sales are not credited to any specific employee, thereby having no positive impact on individual performance reports. Sources also indicate that no explanation or apology has ever been received from Browett or store management about the original staffing cuts, despite public claims to the contrary. Instead, employees have been told not to discuss the situation with anybody, leading to an overall decrease in employee morale.

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Comments

1

Ya, this is going to go over well.  Last time I saw this, I watched Circuit City replace all their adequately-paid audiophiles with low-wage, apathetic teenagers that were scripted into push warranties with each sale.  At least Circuit City gave some decent deals when they had their store closing blowout sales.

Posted by Raphael Salgado on August 28, 2012 at 2:53 PM (CDT)

2

Bad news indeed. One of Apple’s strengths has been the quality of the complete user experience, from product purchase through maximizing usage thereof to replacement. These cutbacks, in the name of profits, threaten to turn Apple into Dell and/or Samsung.

Posted by Mollari 2261 on August 28, 2012 at 4:09 PM (CDT)

3

Welcome to my world. I work for an organization that works for the military overseas. The laying off of performers and lowering of facility upkeep budget in favor of the hiring of apathetic teenagers as well as self entitled spouses has been killing morale and efficiency for over a decade. The profits that came at the beginning of this implementation have long since been replaced by lower customer satisfaction and disciplinary paperwork. Overtime doesn’t exist, but we are expected to work past our normally scheduled hours regularly, then watch as our timecards get adjusted back to the 40hrs a week max. We’ve tried fighting, but it’s not a battle we will not win. So, it is what it is. At least I have a job and am close to family is what I keep telling myself.

Posted by Cereal in Japan on August 28, 2012 at 4:49 PM (CDT)

4

As an IT professional and avid Apple customer/advocate this news is very disappointing. Here’s what I surmise is happening: Browett is falling into the trap so many corporate executives have done in the past. Trying to maximize short term profit or metrics while abandoning the recipe that made the company successful. When I say short term I talking the 1-3 year range. That’s really the amount of time a shift like this takes before the ill effects become apparent. Sure in the short term devoted customers will grin and bear it. New customers won’t know the difference and think “that’s just the way it is”. The profit margins will go up due to the cutbacks.


After a while the product cycles will begin to turn (new iPhone and Mac versions) and existing customers won’t come back. Bad press and poor in-store experiences will sour new customers. All customers begin to migrate to other retail outlets to avoid the crowds and lack of service. This puts them in an enviroment to be talked into non-Apple products and more customers are lost.

I just don’t understand how executives can be so myopic and ignorant. Apple has always been about passion. The Passion for design, user experience and quality which has produced enourmous profits. It’s been well known that SJ has shot down or shelved numerous potential products that were missing one of the above. Could they have put a device that was less than 100% out and still make a profit…??? Yes of course they could have, a ton of companies actively work on this concept. Apple stood apart in the fact that their products work as advertised and have long life spans.

How can they not fathom that taking away the passion will lead to ruins…??? But what do I know…TheDude

Posted by TheDude on August 31, 2012 at 1:35 PM (CDT)

5

Over the past 10yrs, Apple profits have come from a steady roll out of newer and better products, combined with a messianic frenzy among their fans.  Product cycles drove demand and increased market share, and profits exceeded all expectations. An internal decision to generate more profit from a change in how the iStores do business is ominous.  Is this a sign that upper management does not expect their current growth trajectory to continue ?  If so, there are going to be a lot of disappointed shareholders.  If true, the Apple Halo will begin to tarnish and consumers will begin to change their mind in how they regard Apple as company.  Not good.

Posted by rl1856 on September 3, 2012 at 7:49 PM (CDT)

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