No, Apple Did Not Lay Off 1,600

Apple Store

The eminently quotable Mark Twain once said, “A lie can make it half way around the world before the truth has time to put its boots on.”

Just one day after Apple (NASDAQ: AAPL) filed its 10-Q quarterly earnings report, the Internet lit up with screaming stories that Apple had canned 1,600 staffers from its retail stores, this despite a respectable quarter where the company beat estimates and reported a tidy profit.

It all stemmed from the entry in the 10-Q that the retail group had “approximately 14,000 full-time equivalent employees” at the end of March, whereas there had been 15,600 at the end of December.

All Things D was the one blog to keep a cool head about things and point out that the report stated Apple was reporting total man-hours, not headcount. The term “full-time equivalents” is an accounting term that measures the number of man-hours Apple is paying for in that quarter, not the number of people employed in the 252 stores.

It’s an unfair comparison, noted Stephen Baker, vice president of research with NPD Group, because it’s comparing the fourth calendar quarter, the busiest of the year, against the first.

“Retailers hire more people in that time period,” he told “They give their people a lot more labor hours because it’s busier. In the first quarter, sales were slower so they would certainly cut people’s hours.”

Every retailer from Best Buy on down will staff up with short-term help for the holidays and then reduce their headcount come January, and Apple is no different.

“Yeah, they may have let some people go, they certainly cut people’s hours, but they certainly didn’t fire 1,600 people,” Baker said. “They don’t need as many people in the stores right now. The beauty of retail is with a lot of part-time people, you can gin up or gin down as volume rises and declines without huge cost to the company.”

It didn’t help that Apple only opened one new story in the quarter. Had it continued its aggressive expansion plans, the man-hours might have come out higher.

But Apple, like every other retailer, is coping with the economic downturn and has scaled back its expansion plans. The company originally planned to open 50 stores in its 2009 fiscal year (which ends in September) but now plans 25 stores, half of them outside the U.S.

Baker said he expects this quarter to be a quiet one, owing to traditional seasonal slowness and the fact that the economy remains pained. And, he said, Apple probably won’t be the first company to recover.

“I suspect that they are not the point on the spear in terms of volumes from notebooks,” he said. “I don’t think you’ll see a recovery from them first. The new iPhone [expected this summer] will draw more people in. Whether that drives incremental Mac sales, I’m not sure those two are related.”

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