Apple Inc. (NASDAQ:AAPL) was in the news recently for some very bad reasons that related to its treatment of employees.
There were media reports that the company had inexplicably been taking the axe to employee numbers at its retail stores, and had also curtailed working hours.
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According to this report in the Businessinsider, it appears that these changes were being pushed by Apple Inc. (NASDAQ:AAPL)’s newly-appointed head of retail operations, John Bowett, in a drive to boost the profitability of the stores by making them leaner. Bowett has been quoted as saying that the stores were “too bloated” in his opinion. He therefore instructed the retail stores to take steps such as laying off employees unable to work part-time hours, cutting down overtime and stopping promotions. Macrumors noted that lay-offs had been reported at stores around the world.
Understandably, these steps have resulted in employee outrage, and thereafter, media criticism. In one view, these steps were quite uncalled-for, as it is well-known that Apple stores are highly profitable, and an average employee generates as much as $420,000 in annual sales.
Apple Inc. (NASDAQ:AAPL)’s efforts at damage control of the situation and clarifications of its position have been reported here. It appears that according to Bowett, the company had been experimenting with a new staffing method for its retail stores, which resulted in some employees having their hourly shifts cut and understaffing in a few locations. The situation ended within a few weeks after the company reverted to the old system. However, according to the article, no one was laid off, and in fact the company was hiring new staff. This fact was also made known to Apple employees in a communication from Bowett, which also admitted to having “messed up.”
Apple Inc. (NASDAQ:AAPL) spokeswoman, Kristin Huguet, is reported to have clarified: “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.”
The incident reflects a rare misstep by Apple Inc. (NASDAQ:AAPL), considering that the key, back-to-school shopping season is here, and the launch of the much-awaited iPhone 5 is reportedly around the corner.