Apple messed up: retail layoffs were a glitch, changes are being reversed

MacRumors caused quite a commotion earlier in the week with a worrying story about significant layoffs of Apple’s retail staff in the United Kingdom, United States and Canada, just a few weeks before the next iPhone‘s arrival.

Responding to news, Apple’s new retail boss John Browett has gone on the record, likening those changes to a glitch in the system, an unusual case of management miscommunication at Apple, if you will.

Changes are now being reversed and Browett reportedly instructed leadership teams to tell employees that “we messed up”.

Wait, what?

Earlier reports described a host of changes resulting in retail cuts, such as less or no overtime, lay offs of both recent hires and folks on their probation period – even fewer workshops and fewer hours for full time employees.

It was all one big misunderstanding, Apple argues, one that has forced the Cupertino firm to acknowledge the problem and do something it’s not accustomed to: backpedal.

Dow Jones has the story:

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.

But what about this (emphasis mine)?

This happened for a few weeks before the company decided to revert to its older system, hoping to rectify the problem.

Browett issued an indirect apology to retail employees.

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.

I take it he meant “I messed up” but figured the proverbial “we” sounded better.

That’s not all, an Apple spokesperson also issued a written statement:

Making these changes was a mistake and the changes are being reversed. Our employees are our most important asset and the ones who provide the world-class service our customers deserve.

Wow, at this point heads may roll at Apple…

While we’re at it, how the heck can a company which prides itself with spectacular stores try “a new staffing formula” which resulted in unjustly layoffs and then ignore the avalanche of internal complaints for a few weeks before deciding to “rectify the problem”?

This is Apple we’re talking about, not some rookie retailer with no experience in managing retail employees.

If I’d have to take a wild guess, I’d say that the blame is on John Browett.

There’s no way around the fact that this mess happened under Browett’s watch.

IFO Apple Store noted as much, blaming Browett for “a series of recent administrative moves to reduce the number of Apple retail store employees” in order to increase Apple’s retail profit margins.

The publication, which specializes in tracking Apple’s retail efforts across the globe, shares more disturbing news:

Browett’s decision reportedly came despite strongly-worded advice from Retail segment veterans that reducing personnel ahead of the annual Back-to-School promotion and the September introduction of the iPhone 5 could create a customer service catastrophe.

And what did Browett do?

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


Compromising the customer experience to cut some costs?

Dude, this ain’t goddamn Dixons!

Jim Dalrymple of The Loop agrees:

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.

So, Browett wanted to prove his worth to Apple, but his bright move ran counter to Apple management’s view of what retailing should be about.

Such a reversal of a major decision by Apple Retail’s boss could have come only from the highest authority, CEO Tim Cook, in my personal opinion.

Left: Ron Johnson, former SVP of Retail and the guy who created the Apple Stores
Right: your fall guy John Browett, Apple’s current SVP of Retail and former Dixons CEO

I’m not being too harsh too Browett: the new “staffing formula” was nothing if not an uncharacteristically public misstep for America’s greatest retailer.

If I wanted to be harsh, I’d say that Apple deserves a better retail head than Browett.

And I ain’t even mentioning the Genius ads!


Browett took over from Apple’s previous senior vice president of retail Ron Johnson (who turned Apple’s retail vision into a reality, now the CEO of JCPenney) in January 2012.

The 49-year-old executive came from UK’s electronics retail group Dixons, where he served as CEO from December 2007.

His appointment was met with some skepticism as Browett had some big shoes to fill, despite his degree in Natural Sciences from Cambridge University and an MBA degree from Wharton Business School.

Apple operates 373 stores in 13 countries that in the June quarter raked in $4.1 billion in revenues, an increase of 17 percent from a year ago, with an average per-store revenue pegged at $11.1 million.

Dixons is no slouch either, but perhaps Browett is not the right man for the job after all.

What do you think?

My stance is known: it’s time for Browett to go.