Apple Cuts 10 Percent of Its Retail Store Jobs

Apple filed papers with the SEC on April 23, revealing that 1,600 retail employees had been cut since December. The SEC filings additionally pointed to the high fees it would incur, were it to break lease commitments. With Mac desktop sales down, but iPhones keeping wind in its sails, the cuts may be little more than a prudent adjustment during difficult times, one analyst suggests.

Apple appears to have recently cut a little more than 10 percent of its full-time retail employees, according to a filing recently made with the U.S. Securities and Exchange Commission.
As of Dec. 27, 2008, Apple had 15,600 "full-time equivalent employees," but as of March 28 the number was down to 14,000 full-time retail store employees.
Apples' retail net sales increased by 1 percent, or $20 million, during the second quarter of 2009, as compared to the second quarter of 2008, according to the SEC filing, which attributed the increase "predominantly to increased iPhone revenue and strong demand for MacBook, [and was] offset partially by a decrease in sales of most other Mac portable and desktop systems and iPods.
"It's significant," said Roger Kay, an analyst with Endpoint Technologies Associates, referring to the job cuts. "But it's not a harbinger of a lot more cuts of a similar nature."
Kay offers a sailing metaphor, comparing Apple to a ship on a stormy sea.
"They've trimmed their sails, and they're adjusting to the conditions of the seas," said Kay. "It's more adjusting [to circumstances] than a major sign of some big thing going on."
Apple's filing also stated that it had "outstanding lease commitments associated with retails space of $1.3 billion," and that would "incur substantial costs if it were to close multiple retail stores and such costs could adversely affect [Apple's] financial condition and operating results."
One new Apple store opened during the second quarter of 2009, for a total of 252 stores - up from 208 stores during the second quarter of 2008.
"When they first started retail, I was very skeptical - a lot of people were," said Kay. "There are a lot of fixed costs in retail. Companies like Gateway have really gotten stuck with that. Apple made it work, though, by [investing in beautiful spaces and] making their stores go-to places. Gateway chose suburban malls that weren't highly trafficked. Apple gambled more and won bigger."
Now, "The Mac volume is down, and iPhones only up a bit, so they're being careful," Kay added.
April reports from Gartner and IDC showing first-quarter 2009 PC shipments placed Apple in fourth place in the United States, though the Cupertino computer maker fell out of the top five on the worldwide shipping stage.
In recent Forrester Research data on customer experiences, Apple easily came out on top.