Friday, August 17, 2012

Apple Inc.(NASDAQ:AAPL) Retail Boss Reducing Staff at Stores to Raise Profitability

Earlier this week, there were reports that Apple Inc.(NASDAQ:AAPL) reducing the staff-strength in its retail stores and people were left wondering why the company was taking this step at a time when it is on the verge of releasing its new iPhone and upgraded version of its other devices.

Now it looks like the mystery may have been solved. The reduction is an initiative by Apple's senior Vice President Retail, John Browett, who wants the stores to be profitable and contribute more to the overall profitability of the company, according to ifoAppleStore.com, that tracks all information and news related to Apple's retail stores.

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The market has been perplexed by the staff cuts, especially as the stores are seeing more foot falls in recent weeks, in anticipation of Apple's imminent launches.

"But according to those with close ties to the retail stores, Browett feels the stores are “too bloated” with employees, and he is willing to gamble the stores’ legendary customer experience to gain back a few points of profit margin," the site reported.

Curiously, on Thursday the Wall Street Journal ran a story in which Browett admitted that the company had made mistakes with its staffing levels.

"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 the company had been trying a new staffing formula for its retail stores," the Journal said citing unidentified sources.

This was what had led to the reduction of employees at its retail stories. However he denied that employees had been laid off.

Incidentally the head of Apple’s retail operations seems to have taken the decision to reduce staff despite strong opposition from veterans in the retail segment that reducing staff ahead of "the annual Back-to-School promotion and the September introduction of the iPhone 5 could create a customer service catastrophe."

Browett however disagreed with his staff and said the "chain needs to learn to run “leaner” in all areas, even if the customer experience is compromised."

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