Apple, Palm taking different steps to reduce worker overhead

[AppleInsider]

While Apple is giving its phone rival Palm a drubbing in the market, both are now known to be scaling back their work commitments to employees -- though Apple is using creative reassignments to soften the perceived blow.

People familiar with the matter say Apple plans to cope with the harsh economic climate by minimizing the need to lay off staff in favor of reducing hours and asking others to perform double duty.

The Cupertino-based firm is conscious that any retail layoffs would give a negative impression of its health and hurt its share value, and instead plans to scale back the hours worked by its part-time Mac Specialists that greet customers and promote products. This would keep them on the store floors while trimming employment costs, those aware of the changes say.

To compensate for the shortfall, Geniuses normally assigned to servicing products and answering questions will be asked to spend four of their weekly hours in the Mac Specialist role. Creatives manning the Studio sections of some stores will be asked to work as many as eight hours selling products.

How this pans out is still to be determined. Apple is running trials of this shuffled retail management to learn whether it should expand the reorganization on a broader level or consider alternatives that may include shelving the plans.

What's less than ambiguous, however, is a more drastic move by Palm. The beleaguered Treo maker has confirmed rumored restructuring to CNET and will take the much more direct approach of laying off employees in a bid to get its finances under control.

Company spokeswoman Lynn Fox isn't specific as to the lost head count or the reasons: she explains only that the job cuts are necessary to cope with Palm's "challenges" and that the firm needs to "focus [its] efforts more effectively."

While a struggling US economy plays into Palm's difficulties, the early smartphone pioneer no longer has the foundation of a successful business to cushion its fall. The company recently posted a $42 million loss and has been effectively ousted from its leadership role in the US workplace. Both Apple's iPhones and Research in Motion's BlackBerries have stolen Palm's market share in a market that was once considered a mainstay for the Treo line.

The Sunnyvale, California device maker also has to face a largely stalled product development process. Its Linux-based replacement for PalmOS 5, codenamed Nova, is overdue and now isn't set to ship with smartphones until the first half of 2009. Until then, the company is primarily relying on sales of its popular but low-profit Centro and its Windows Mobile-based Treos to sustain its business.

In a move that brings the company's difficulties full circle, Palm is also counting on former Apple senior engineering VP Jon Rubinstein to revive its fortunes by reorganizing Palm's staff and emphasizing better design.

[ View this article at AppleInsider.com ]

[valanchan]

When companies are able to hire again I wonder who good people would like to work for.

[merdhead]

The question is, how far is Apple willing to go to protect its premium prices? If the recession goes on long enough (and it looks like it will) then sales will drop along with profits. I'm guessing that Apple would rather start laying off people than report a loss. Either way, people aren't likely to pay $1000+ for a laptop when they can get something workable for $500. If they don't have the money they don't have the money.

My guess is we will see layoffs ext year.

[aplnub]

Originally Posted by merdhead

Either way, people aren't likely to pay $1000+ for a laptop when they can get something workable for $500. If they don't have the money they don't have the money.

I have never bought this argument. If that was the case, then explain the consistent increase in sales? Good times or bad, sales will go up and down but I think Apple will maintain prices. It is hard to drop prices on equipment and then explain that to your existing customer base. i.e. iPhone.

Layoffs may come but who knows, gun and ammo sales are so high right now that industry alone may pull us out of this economy.

[aaarrrgggh]

Originally Posted by aplnub

I have never bought this argument. If that was the case, then explain the consistent increase in sales? Good times or bad, sales will go up and down but I think Apple will maintain prices. It is hard to drop prices on equipment and then explain that to your existing customer base. i.e. iPhone.

Just bought an Acer Aspire One. Not concerned about curtailing my spending, but the money I was willing to spend on a new computer was significantly lower than three months ago. I would have paid a $100 premium over the $450 (with taxes and shipping) for an Apple product (god I hate Windows!), but Apple doesn't have any offerings in this space. (I need a small, lightweight computer that is easy enough to take home and travel with relative to the 17" MBP.)

What that ultimately means is that I am less willing to spend money upgrading my wife's computer for a new MacBook, and I need a darn compelling reason to upgrade my 17". This doesn't bode well for Apple if there is a prolonged recession. This is not because I don't have the money to spend, but I see significantly lower value in what Apple is offering today.

I am a shareholder. I have lost more money on Apple than I made from my job this year, and three times what I made two years ago. It is important to me that Apple makes a good profit. At this point though, I want Apple to win mind share over making a great profit; profit doesn't really matter in increasing share value.

[MacTel]

Originally Posted by merdhead

The question is, how far is Apple willing to go to protect its premium prices? If the recession goes on long enough (and it looks like it will) then sales will drop along with profits. I'm guessing that Apple would rather start laying off people than report a loss. Either way, people aren't likely to pay $1000+ for a laptop when they can get something workable for $500. If they don't have the money they don't have the money.

My guess is we will see layoffs ext year.

We'll see if this rumor is true or not come their next quarterly filing.

This is indeed a recession but more exactly a world recession. Our banks and industries are so interwoven with foreign companies that it has become a domino effect with first the mortgage fiasco and then into construction, banking, and auto industry. If GM were to fail it would be felt world-wide.

Soon the luxury industries that include Apple will feel the affects and not in just the retail sector.

The only hope for our economy is a president that can imbue confidence in the American consumers. It is unbelievable that we have a sitting president that cannot stand up and do this. He has essentially already stepped down from power. He is the lamest duck president in all history of the U.S. I ashamed to be a registered republican.

Let's all hope Apple and the tech sectors hang in there along with the recovery of the rest of our economy with the new president coming into power.

[sflocal]

Originally Posted by merdhead

TEither way, people aren't likely to pay $1000+ for a laptop when they can get something workable for $500. If they don't have the money they don't have the money.

You're comparing what a $500 laptop gets you versus what something in the $1K+ range has? I would gladly pay extra knowing the quality is there. I haven't seen a $500 laptop that is not a total piece of plastic garbage that will give you (if you're lucky) more than a year of dependable service before it starts falling apart.

"Cheap" usually ends up costing more in the long run. I would rather wait longer to save more to buy something of better quality than to bite the bullet and try to save a few bucks and end up with something that will probably break down sooner than later. That is a major problem with the world today. Hence the motto "The high cost of low prices".

Times are tough and that I totally agree with.

[kaiwai]

Originally Posted by merdhead

The question is, how far is Apple willing to go to protect its premium prices? If the recession goes on long enough (and it looks like it will) then sales will drop along with profits. I'm guessing that Apple would rather start laying off people than report a loss. Either way, people aren't likely to pay $1000+ for a laptop when they can get something workable for $500. If they don't have the money they don't have the money.

My guess is we will see layoffs ext year.

If they don't have the money, they wouldn't be buying the $500 one either. I've hit hard times before, and I can tell you that I've never gone for the cheaper one - I've always made sure my existing things just kept on ticking until better times arrived.

You either spend $1000, $500 or not spend it. Current situation is that people are going to not spend the money at all and focus on paying the bills.

[merdhead]

Originally Posted by sflocal

You're comparing what a $500 laptop gets you versus what something in the $1K+ range has? I would gladly pay extra knowing the quality is there. I haven't seen a $500 laptop that is not a total piece of plastic garbage that will give you (if you're lucky) more than a year of dependable service before it starts falling apart.

"Cheap" usually ends up costing more in the long run. I would rather wait longer to save more to buy something of better quality than to bite the bullet and try to save a few bucks and end up with something that will probably break down sooner than later. That is a major problem with the world today. Hence the motto "The high cost of low prices".

Times are tough and that I totally agree with.

If your budget is $500, it doesn't really matter what you can buy for $1000.

[Shookster]

I don't understand how this saves Apple money. If the employees work at an hourly rate, it would end up costing Apple more because the Geniuses and Creatives probably get paid more than the people who greet customers (and if they're paid the same, there'd be no change at all). If they're salaried, there would be no difference in costs.

Am I missing something?

[caribbean_mac]

Palm ceo should just offer a deal to apple

darn im sure running Palm is like BEATING A DEAD HORSE

[JAQ]

The only way the math on this would work out in Apple's favor is if - by putting Geniuses and Creatives on the sales floor - they were also cutting back on the staffing hours at the Genius Bar and Creative Studio. The problem with this strategy is, there's no reason to expect that tech support traffic will drop off due to the economic situation (might even go up if people are more intent on fixing rather than replacing their sick MacPods). The training sessions are already paid for the next year, aren't they? So that traffic wouldn't drop off either.

So they'd be hurting the quality of their tech and training departments by understaffing them, and they'd be hurting the quality of their sales department by putting trainers and techs to work selling (for which they're overpaid and probably not as good at as an actual salesperson). Seems like it'd be much simpler and safer to just adjust the hours the part-time Specialists are working based on the amount of sales traffic the stores are getting, and leave the parts of the business that are more recession-proof alone.

[Messiah]

Originally Posted by caribbean_mac

Palm ceo should just offer a deal to apple

darn im sure running Palm is like BEATING A DEAD HORSE

I love how Palm think that they can restructure their way out of this situation.

It seems to be obvious to everyone else but Palm, that Palm needs to start again from scratch. Until they get the foundation right, they're dead in the water.

Apple spent the time and the money getting the foundations right... and now they're reaping the rewards...

[aplnub]

Originally Posted by MacTel

We'll see if this rumor is true or not come their next quarterly filing.

This is indeed a recession but more exactly a world recession. Our banks and industries are so interwoven with foreign companies that it has become a domino effect with first the mortgage fiasco and then into construction, banking, and auto industry. If GM were to fail it would be felt world-wide.

Soon the luxury industries that include Apple will feel the affects and not in just the retail sector.

The only hope for our economy is a president that can imbue confidence in the American consumers. It is unbelievable that we have a sitting president that cannot stand up and do this. He has essentially already stepped down from power. He is the lamest duck president in all history of the U.S. I ashamed to be a registered republican.

Let's all hope Apple and the tech sectors hang in there along with the recovery of the rest of our economy with the new president coming into power.

It is funny how everyone thinks one man can snap their fingers and make it all get better. PE Obama will not be able to do this either. This stems from lending money to people who couldn't afford the loans to begin with. People who don't use budgets but rather the distortion field to justify purchases while running up credit card limits have a brought any hardships on themselves. What ever happened to saving money and buying when you had the money?

Originally Posted by aaarrrgggh

Just bought an Acer Aspire One. Not concerned about curtailing my spending, but the money I was willing to spend on a new computer was significantly lower than three months ago. I would have paid a $100 premium over the $450 (with taxes and shipping) for an Apple product (god I hate Windows!), but Apple doesn't have any offerings in this space. (I need a small, lightweight computer that is easy enough to take home and travel with relative to the 17" MBP.)

What that ultimately means is that I am less willing to spend money upgrading my wife's computer for a new MacBook, and I need a darn compelling reason to upgrade my 17". This doesn't bode well for Apple if there is a prolonged recession. This is not because I don't have the money to spend, but I see significantly lower value in what Apple is offering today.

I am a shareholder. I have lost more money on Apple than I made from my job this year, and three times what I made two years ago. It is important to me that Apple makes a good profit. At this point though, I want Apple to win mind share over making a great profit; profit doesn't really matter in increasing share value.

A $100 premium over a $450 notebook? I would call that tax. That is not the market Apple wants and not the market that makes money. You were not the customer Apple seems to be looking for.

[mjtomlin]

Originally Posted by kaiwai

If they don't have the money, they wouldn't be buying the $500 one either. I've hit hard times before, and I can tell you that I've never gone for the cheaper one - I've always made sure my existing things just kept on ticking until better times arrived.

You either spend $1000, $500 or not spend it. Current situation is that people are going to not spend the money at all and focus on paying the bills.

This I agree with. I would think most people who would consider paying $1000+ for an Apple, are generally not going to be interested in a cheaper, non-Apple computer, and would rather just save and wait. Or they may decide to buy a used Mac if they really needed a computer at that point in time. (I have a 6 year old 12" PowerBook running Leopard that, while it won't win any speed tests, still works fine for general use.)

The other side of this issue is, someone who is only willing pay $500 for a computer will simply decide not to buy as well and wait until they can afford it. This type of person doesn't place that much importance or value in computers anyway.

The point people seem to miss is that everyone is affected by the recession and the companies that will be hurt the most are the ones that have the smallest margins; they need massive sales to make a significant profit. Apple is in a better position with all of its cash and can use it to continue to pump money into their R&D and hiring for key positions during a time when most other companies will be cutting back to build up their bottom lines. I believe if any cut-backs are made by Apple it will definitely only happen in its retail division; less customers walking in the door, means less staff needed on the floor.

[malax]

Originally Posted by aaarrrgggh

I am a shareholder. I have lost more money on Apple than I made from my job this year, and three times what I made two years ago. It is important to me that Apple makes a good profit. At this point though, I want Apple to win mind share over making a great profit; profit doesn't really matter in increasing share value.

Let's suppose you make $60K. That means you own something like 500 shares of AAPL that has been worth from $40,000 to $97,500. Methinks you should diversity your portfolio. Or maybe you won the lottery and have a ton of wealth, in which case guy buy a MacBook Air and don't worry about a $400 Acer laptop.

[chedi]

Originally Posted by merdhead

Either way, people aren't likely to pay $1000+ for a laptop when they can get something workable for $500. If they don't have the money they don't have the money.

This may be the case if you're a Windows user and not a very picky consumer but I doubt a Mac user would consider switching to a cheap PC if he or she can't afford the latest Apple offering.

If you're in the market for a BMW, you aren't going to settle for a Kia.

[Adjei]

I don't think people buying Apple's products are worried about putting food on the table or lining up at food banks.

[bloggerblog]

I'd like to point out that Palm's initial success was the Pilot which became insanely successful after Apple dumped the Newton in '97. The Treo was a combination of the Pilot and a phone, so one can conclude that, although far fetched: Since Apple is back in the game, Palm is back to where it was supposed to be, and should either put up or downsize.

[Rot'nApple]

Originally Posted by malax

Let's suppose you make $60K. That means you own something like 500 shares of AAPL that has been worth from $40,000 to $97,500. Methinks you should diversity your portfolio. Or maybe you won the lottery and have a ton of wealth, in which case guy buy a MacBook Air and don't worry about a $400 Acer laptop.

Unless his yearly pay was based on a minimum wage type job and when and at what price was paid for the stock. Then the stock ownership would require considerably less amount to have to make the original statement true.

[JeffDM]

Originally Posted by Messiah

I love how Palm think that they can restructure their way out of this situation.

It seems to be obvious to everyone else but Palm, that Palm needs to start again from scratch. Until they get the foundation right, they're dead in the water.

They've restructured and rearranged so many times it's not funny.

I wish Palm did get it right, but I think they're past recovery, even if they released their new OS right now. It's too bad. I had a Palm-based Zodiac and it did its job very well. It had a 3D chip for games, but didn't waste user time doing superfluous time-based animations on standard PDA functionality, even though it looks like they could have. Apps actually launched in very small fractions of a second.

Originally Posted by bloggerblog

I'd like to point out that Palm's initial success was the Pilot which became insanely successful after Apple dumped the Newton in '97. The Treo was a combination of the Pilot and a phone, so one can conclude that, although far fetched: Since Apple is back in the game, Palm is back to where it was supposed to be, and should either put up or downsize.

Sequence doesn't mean causality. Newton wasn't a market success. Besides, it was too expensive and too big. Palm was hurting anyway in the past few years, it would still be in trouble whether or not Apple entered the phone market.

[Haggar]

Originally Posted by valanchan

When companies are able to hire again I wonder who good people would like to work for.

Depends on how much these people's hours are being cut. Cutting someone from 20 hours a week down to 4 hours a week might be just as bad as a layoff.

[solipsism]

Originally Posted by Haggar

Depends on how much these people's hours are being cut. Cutting someone's hours from 20 hours down to 4 hours a week might be just as bad as a layoff.

Worse in many ways. I think you have to be laid off to get unemployment and if the company isn't making their hours worked consistent it could interfere with looking for a real job.

[TBell]

I agree. I am a Mac guy. Bad times or good, I am not buying a PC. I might have to put off a Mac purchase, but eventually, I will pay for the Mac regardless if I can get a cheaper Mac.

Originally Posted by aplnub

I have never bought this argument. If that was the case, then explain the consistent increase in sales? Good times or bad, sales will go up and down but I think Apple will maintain prices. It is hard to drop prices on equipment and then explain that to your existing customer base. i.e. iPhone.

Layoffs may come but who knows, gun and ammo sales are so high right now that industry alone may pull us out of this economy.

[TBell]

Yes, the diversification argument is nice except that the whole entire market has lost just as much. Apple is one of the best performing companies right now and it's stock is being hit just as hard as everybody else.

Originally Posted by malax

Let's suppose you make $60K. That means you own something like 500 shares of AAPL that has been worth from $40,000 to $97,500. Methinks you should diversity your portfolio.

[bloggerblog]

Originally Posted by Messiah

I love how Palm think that they can restructure their way out of this situation.

It seems to be obvious to everyone else but Palm, that Palm needs to start again from scratch. Until they get the foundation right, they're dead in the water.

Apple spent the time and the money getting the foundations right... and now they're reaping the rewards...

Yes, but the question is who should do the restructuring? Apple had a similar experience they were losing market share like no one else, so they also restructured, remember Michael Spindler and Gil Amelio, yet nothing positive happened till Steve Jobs stepped in.

[nvidia2008]

Originally Posted by JAQ

The only way the math on this would work out in Apple's favor is if - by putting Geniuses and Creatives on the sales floor - they were also cutting back on the staffing hours at the Genius Bar and Creative Studio. The problem with this strategy is, there's no reason to expect that tech support traffic will drop off due to the economic situation (might even go up if people are more intent on fixing rather than replacing their sick MacPods). The training sessions are already paid for the next year, aren't they? So that traffic wouldn't drop off either.

So they'd be hurting the quality of their tech and training departments by understaffing them, and they'd be hurting the quality of their sales department by putting trainers and techs to work selling (for which they're overpaid and probably not as good at as an actual salesperson). Seems like it'd be much simpler and safer to just adjust the hours the part-time Specialists are working based on the amount of sales traffic the stores are getting, and leave the parts of the business that are more recession-proof alone.

I think Apple has a little better intentions, though because the Retail industry in general is just totally shit (ask anyone with any experience as a manager or staff, etc.) I can't see how Apple can get their Retail humming along as well as it has in the current environment.

I agree that there should be a discussion with the Specialists, a target number of hours for the whole store should be decided upon. Then from this, have a process whereby some full-timers may want to go part-time (happens a lot, people go back to school or other things), and some part-timers may want to go full-time. Inevitably some under-performing staff may have to be asked to cut down their hours.

Additionally, some intelligent forecasting should be done so that part-time Specialists are scheduled at peak times and rotated off during quieter times of the day/week.

I agree that Genius should be as untouched as possible. Not that these people are the "chosen ones", but I've seen the *tech, creative and training* aspects of Apple Resellers be cut back drastically during "difficult" times and sales really just go down the toilet.

Once the air of desperation kicks in at a particular retail operation, that's pretty much the deathblow because it creates a very vicious downward spiral.

[nvidia2008]

Originally Posted by solipsism

Worse in many ways. I think you have to be laid off to get unemployment and if the company isn't making their hours worked consistent it could interfere with looking for a real job.

Originally Posted by Haggar

Depends on how much these people's hours are being cut. Cutting someone from 20 hours a week down to 4 hours a week might be just as bad as a layoff.

Certainly good points. However it is interesting to note that there is some leeway as a vast majority of Concierge and Specialist staff are fairly young, say under 25, some are still at college/uni and do several casual jobs over the course of several years.

I would define the core operations and core revenue driver of the stores to be based on knowledge. That means, Geniuses, Creatives, Business, Trainers, one would hope they would prioritise. (Some areas to lighten a bit IMHO is say at Regent Street London, they have a presentation almost every hour. This could be lightened to every two hours or so.)

Not that young Concierge and Specialist staff are less worthy, but there is a bit more flexibility there, because while they love to work for Apple Retail, for them, career wise, it is a bit more open. And they are a bit more forgiving so the culture and morale of the store may not suffer too badly.

To be honest, there would be some Specialist and Concierge staff that may want to leave, or just keep a few hours here and there because they are passionate about Apple. For them, asking for reduced hours, or a resignation, may reflect very badly, or they are just worried about requesting that. So it is an opportunity for these staff to "renegotiate" their working arrangements with Apple.

Some staff that work say just 6 hours a week, if they are knowledgeable, passionate, and not to disruptive to the full-timers, can contribute greatly. Just a few of these guys/gals on a real busy Saturday can really take the heat off the full-timers.

F*king with the Genius and Training operations too much can really harm morale and sales, because then the store is competing on hardware specs and design, as opposed to knowledge, value, and experience-based advantages of getting Apple products.

My two cents (dollars, perhaps).

PS I know the above sounds good in theory, it can work, but it takes really good common sense, smart retail management to pull off. From what I've seen, Apple Retail is the one most likely that can do it, but, like I said previously, retail is retail is crappy.

[nvidia2008]

Originally Posted by AppleInsider

How this pans out is still to be determined. Apple is running trials of this shuffled retail management to learn whether it should expand the reorganization on a broader level or consider alternatives that may include shelving the plans...

From what I know and from my two rounds of interviews with Apple UK Retail, they have a lot of discussions and meetings, meetings among managers especially, to decide on this kind of stuff.

It's great that AppleInsider has divulged some details but as AppleInsider mentions these plans will be fairly fluid over the next several months.

[nvidia2008]

Originally Posted by valanchan

When companies are able to hire again I wonder who good people would like to work for.

That's the real killer sometimes, when times are good a lot of places attract and retain good people, and people enjoy working there. When times are bad, that's when things get messy.

Given these good-times/bad-times cycle is now running almost every 5+ years, due to the interconnected global economy stuff, I too wonder how one, if one has experience, is capable, and intelligent, can navigate the waves of uncertainty.

[Hawkk]

With more than 21 billion dollars in the bank. Apple could help their workforce go through this "financial crisis" with more consideration. What would be the economic strain on the retail section of Apple if they would do this? How much money will they really save? Why not cut the high ranking executive bonuses or even a pay cut to help out low salary employes (I'm sure they have enough options to compensate). Apple already pays their employes under the industry standard (for the joy of working for Apple) cutting the hours of part-times to please share holders and maintain their image is a poor solution.

Grant you Apple is not a charitable organization, they are there to make money but they are not about to go bankrupt either. Are they about to close an Apple Store (that would be a first)? Clean what needs to be cleaned up before reducing your workforce, these are the people meeting, greeting the customers and selling the computers to them. Apple has been paying a multi-million dollar lease for years for an empty space in NYC and who knows what other futile expenses that no-one knows about. BTW who is paying for the maintenance for the G5 (GulfStream)?