Apple Retail Leadership Tells Stores It 'Messed Up' Employee Working Hours, Refutes Layoffs
08/16/2012| 12:30pm US/Eastern
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By Ian Sherr
Apple Inc.'s (>> Apple Inc.) retail boss told employees that the company made mistakes with its staffing levels, leading to news reports that the company was cutting employees, according to two people familiar with the matter.
In a communication with store leadership teams, senior vice president of retail, John Browett, who took the reins of Apple's retail stores in April, said that the company had been trying a new staffing formula for its retail stores, leading some employees to see their hourly shifts cut and retail locations to be understaffed. This happened for a few weeks before the company decided to revert to its older system, hoping to rectify the problem.
He instructed leadership teams to tell employees, "We messed up," according to two people who were aware of the communication, which also stressed that while shift schedules were affected, no one was laid off. He also wanted employees to know that it was hiring new staff, these people said.
Apple acknowledged the retail staffing changes. "Making these changes was a mistake and the changes are being reversed," said Kristin Huguet, an Apple spokeswoman. "Our employees are our most important asset and the ones who provide the world-class service our customers deserve."
While the staffing changes were happening, a flurry of news reports surfaced saying Apple had been cutting employee hours and laying off staff. Some employees had become concerned about their jobs after their schedules had been reduced to half-shifts once a week, one person said. Part-time employees appeared particularly hard hit, with one estimating a personal loss of about $1,000 in wages as a result of the schedule shifts.
The dustup represents an uncharacteristically public misstep for the company's retail operations, which serve as both a launch pad for new products and a sales center for the company. The Cupertino, Calif., tech giant began opening the stores in 2001, steadily growing them both in the U.S. and internationally. In July, Apple said it operated 372 stores, 123 of which weren't in the U.S.
Mr. Browett took over as the company's retail boss after Ron Johnson, who helped start the stores, left to become J.C. Penney Co.'s (>> J.C. Penney Company, Inc.) chief executive last November. He came to Apple from Dixons Retail PLC (>> Dixons Retail PLC), a large chain of electronics stores in the United Kingdom.
Mr. Browett initially became popular with staff when the company increased retail employee's pay by as much as 25% earlier this summer following internal reviews and surveys.
The moves also come ahead of Apple's expected unveiling of a new iPhone, during which the retail shops will play a large part. Typically, throngs of customers line sidewalks and street corners outside Apple's shops in hopes of being the first to buy its latest devices.
Write to Ian Sherr at ian.sherr@dowjones.com
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