The Channel Wire

April 24, 2009

Apple may have beaten Wall Street expectations for its second fiscal quarter, but the news isn't all that rosy for Apple's retail workforce. Apple cut the ranks of its full-time retail employees by 1,600, according to the company's most recent 10-Q filing with the Securities and Exchange Commission (SEC).

The reduction brings the overall number of full-timers in Apple's retail force to about 14,000 for its most recent quarter ended March 28. Apple had 15,600 full-time retail employees at the end of December.

In its second quarter, Apple did see its retail revenue increase, up to $1.47 billion in the quarter from $1.45 billion a year earlier. But in its SEC filing, Apple revealed average revenue per Apple-owned Apple store was down to $5.9 million from $7.1 million for the same quarter a year earlier -- a drop of 17 percent.

Apple has opened more than 250 retail locations over the past eight years, averaging 15 new Apple retail stores per quarter. In contrast, Apple opened just one new retail shop in its most recent quarter, and has been temporarily closing stores in places like Oregon, Michigan and upstate New York for renovation, according to Apple Store news site ifoAppleStore.

Apple stores owned by Apple require a "substantial investment in fixed assets and related infrastructure, operating lease commitments, personnel and other operating expenses," the company wrote in its filing.

News of the job cuts comes as Apple earlier this week beat analyst estimates in its overall quarterly earnings, buoyed by exploding sales of its iPhones and iPod devices.

Apple's net profit was $1.21 billion, up from $1.05 billion a year earlier. Revenue was $8.16 billion, up 8.7 percent and besting Wall Street estimates of $7.96 billion.

"In terms of the business units, Macs were a little light of the higher end of expectations, iPods and iPhones both above expectations," said a Kaufman Brothers analyst, Shaw Wu, to Reuters earlier this week.