Apple Stores still in turmoil, sources claim
updated 01:04 am EDT, Tue August 28, 2012
Apple allegedly pushing profit at expense of workers, maintenance
The labor situation in Apple Stores is still in a rough state, despite promises by the company, according to sources for ifoAppleStore. For example, contrary to statements by Apple retail head John Browett, workers were recently laid off or fired, but later just rehired -- and while interstore transfers are now going through, demotions aren't being reversed, overtime is still limited, and managers are assigning minimum hours to part-timers. Apple is thought to be trying several methods of maximizing retail profits, including changing how worker performance is rated.
A greater emphasis on sales has been put in place, according to one source. He says that contract sales of iPhones are being used as a key metric, and now appear on store performance charts. Apple is also tracking "essentials per hero product," meaning sales of accessories and other products alongside core purchases. Clerks are nevertheless being asked to push people to buy accessories using the EasyPay app, even though any revenue from the app doesn't count towards a worker's sales history.
The sources remark that efficiency measures are extending to budgets as well. Stores are reportedly scaling back on workshops, even halting the printed schedules that high-profile outlets have traditionally offered. Training areas in the Family Room and product displays in the Red Zone are allegedly being sacrificed in favor of more "Etc." and accessory shelves, with the aim of boosting sales. Even maintenance budgets are being slashed, which could potentially leave Apple Stores dirtier than shoppers are used to.
Topping off the situation, ifo's sources say that low-level workers haven't received an explanation or apology from Browett or store managers for the recent labor chaos. Instead, they're being asked not to talk about the issues with anyone, including management. Due to all of the combined changes, morale is said to have dropped precipitously in the Apple retail chain.
The sources suggest that the root of the current troubles reaches back to 2009, when Steve Jobs went on medical leave for six months, leaving Tim Cook in charge of Apple. Cook is described as an "operations guy" with a focus on revenues and profits, rather than customers. In Jobs' absence, Cook allegedly joined forces with CFO Peter Oppenheimer to confront the company's then head of retail, Ron Johnson, who was said to have been customer-centric but not generating enough revenue to justify expenses.
Cook supposedly pushed Johnson "quite hard" about how other channels were selling more Macs per capita than retail. Without Jobs to back him up, Johnson is said to have been unable to keep Cook and Oppenheimer from switching to a purely profit-driven focus. Johnson eventually left Apple to become the CEO of JC Penney; Cook is said to have hired Browett because he shared a belief in maximizing profitability.
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If Apple is going through a rough time, I can only imagine what the other consumer tech companies are going through. It seems as though Apple's methods are always put under a microscope. That's what happens when a company is undergoing rapid growth and then there's a change in management. They call it growing pains. I hope Apple is smart enough not to try to merely throw money at the problem. It will probably take careful planning to keep those Apple retail stores running smoothly. The holidays are nearly hear along with the release of the next iPhone. Apple has a lot of work to do to get ready for the customer onslaught.