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Apple Retail VP John Browett Plans to Cut Jobs to Raise Profits

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Source: The Summit in Birmingham, Alabama | Apple

It was reported that recent hires at Apple stores are being laid off, then it was followed by claims that they weren’t. However, there are claims that the downsizing on Apple retails serves as a reversal of policies enacted by the company’s new Retail Vice President John Browett. The policy reversal is an attempt to cut costs and raise profits within the retail segment.

Downsizing Retail Store Employees

In a report posted by IFO Apple Store, a series of administrative moves were made in order to reduce the number of employees in the Apple retail. This move is made by Browett in an attempt to increase the company’s retail profit margins.

According to sources close to the situation, the vice president of retail felt that the stores were “too bloated” with employees. He then started making cuts despite the advice from retail segment veterans that it could cause customer service catastrophe. As stated by retail experts, reducing personnel ahead of the annual Back-to-School promotion and the September introduction of the iPhone 5 could lead to disaster.

In relation to this, there were claims that Browett ordered Apple Store managers to cease all recruiting and hiring events, as well as promotional campaigns. He also instructed to lay off newly hired and probationary employees, reduce available hours for part time workers, deduct or eliminate overtime, and layoff staff who can only work more than 32 hours a week.

There were reports that Browett wanted Apple’s retail outlets to “run leaner in all areas, even if the customer experience is compromised.” On the other hand, Jim Dalrymple of The Loop posted:

It seems to me that Browett is trying to make Apple retail just like every other retail store on the planet. A few employees trying to satisfy an ever growing consumer base. That formula doesn’t work. It may save a few dollars in the short term and Browett may look like a hero on paper, but in reality the whole company would suffer the consequences.

Prior to this, Apple Retail generated $14.1 billion in revenue and $3.1 in profits. The company’s retail segment operated at around 22 percent profit margin for the past five years, and Browett was allegedly looking to improve upon that. At the moment, the retail chain contributes about a tenth of the company’s profits.

Apple recruited Browett last January to head its retail operations. He was the former chief executive for Dixons, a European discount tech retailer.

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