Apple Stores reportedly still face budget cuts, unhappy workers

Apple's retail outlets could be in the midst of some internal strife, with a new report pointing to budget cuts and lower employee morale.

The grand opening of Apple's store in New York City's Grand Central Terminal.
The grand opening of Apple's store in New York City's Grand Central Terminal. Sarah Tew / CBS Interactive

The Apple Store has been touted as the model for retailers. But a new report says the chain's ongoing budget cuts are not going down well with employees.

Citing information from a variety of inside sources, blog site ifoAppleStore claims that the stores are changing "employee performance standards" to focus more on sales and profits over customer satisfaction.

Apple's retail vice president, John Browett, reportedly admitted that the company "messed up" when it implemented a new system that cut hours for some employees and left certain Apple stores understaffed. Trying to reassure concerned employees, Browett told them that no layoffs were planned and that Apple was still hiring new workers.

Store employees told ifoAppleStore that workers had in fact been laid off, fired, or simply assigned no hours but acknowledged that such people had since been rehired following Browett's admission.

However, the job performance of current employees is being measured differently, according to the sources.

Workers are judged on how many accessories they can add to the sale of a core product. They're also being told to direct customers to buy accessories through the EasyPay system. But those sales are credited to the store and not to the employee, which in turn affects the worker's job rating.

Budget cuts also continue to affect employees, according to ifoAppleStore's sources. Overtime hours have been limited, demotions have been kept in place, and part-time workers have been given the minimum number of contracted hours.

Further, "employee morale has plummeted due to the lack of information" about the cuts and staffing changes from Browett, says ifoAppleStore.

Assuming all of this information is accurate, why the shift for Apple's renowned retail stores?

Under the purview of the late Steve Jobs, former retail VP Ron Johnson helped put the Apple Store on the retail map by focusing on the customer experience instead of just selling things.

Johnson wanted Apple employees to strive to help customers, even if that didn't always result in a sale.

But when Jobs went on medical leave in 2009, then-COO Tim Cook and CFO Peter Oppenheimer reportedly pressured Johnson to place more of the emphasis on sales. Johnson left Apple last year to become the CEO of J.C. Penney.

With Browett now in charge of retail and Cook leading the company, that focus on sales and profits apparently has taken further hold, leading to the budget cuts and staffing changes, according to ifoAppleStore's sources.

CNET contacted Apple for comment and will update the story if we receive any information.

 

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