Circuit City cuts pay, lays off better-paid workers

Ever go into a Circuit City store and get overrun by eager sales representatives trying to hustle you with a sale? This has long been one of the tactics used in CC stores that intimidates customers and encourages them to go elsewhere.

The stores are usually well stocked with lots of items consumers want and prices are pretty good. But is being over-run by an aggressive sales staff good for business? For as long as I have patronized CC stores when entering any store I cringe as I walk into the entrance and immediately start watching for sales reps converging on me before I get my bearings.

The company is now starting down a path that will likely push many of their better sales reps out the door and could cause customers to think twice about going into the stores. A plan has been set to lay off better paid employees and replace them with lower paid ones or hire some back at considerably lower pay. It would seem that corporate management thinks customers won't care and that sales will remain the same or improve. This is yet another bad idea hatched by executives out of touch with the real world that will likely bring lower sales and profits and backfire. They don't seem to realize that at in the same effort to cut salaries they are also pushing out thousands of customers that are employees at the same time.

Read more about a plan that is sure to scuttle CC's business...

News and Observer
March 29, 2007
Nae Anderson and Ellen Simon, The Associated Press

Circuit City to lay off better-paid workers

NEW YORK - A new plan for layoffs at Circuit City is openly targeting better-paid workers, risking a public backlash by implying that its wages are as subject to discounts as its flat-screen TVs.

The electronics retailer, facing larger competitors and falling sales, said Wednesday that it would lay off about 3,400 store workers -- immediately -- and replace them with lower-paid new hires as soon as possible.

The laid-off workers, about 8 percent of the company's total work force, would get a severance package and a chance to reapply for their former jobs, at lower pay, after a 10-week delay, the company said. Read more...