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Old 03-28-2007, 11:36 AM   #1
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RICHMOND, Va. (AP) "” Circuit City Stores Inc. said Wednesday it plans to cut costs by laying off about 3,400 retail workers, or 8.5 percent of its in-store staff, and hiring lower-paid employees to replace them. It is also trimming about 130 corporate information-technology jobs.

Its shares rose nearly 2 percent in afternoon trading.

Circuit City, the nation's No. 2 consumer electronics retailer behind Best Buy Co. Inc., said the store workers being laid off effective Wednesday were earning "well above the market-based salary range for their role." They will be replaced as soon as possible with employees who will be paid at the current market range, the company said in a news release.

"We are taking a number of aggressive actions to improve our cost and expense structure, which will better position us for improved and sustainable returns in today's marketplace," Philip J. Schoonover, Circuit City's chief executive, said in a statement.



Circuit City employs about 40,000 part-time and and full-time store employees, according to spokeswoman Jackie Foreman. Those being laid off will get severance packages and may apply for any open positions after 10 weeks, Foreman said.

The company plans to replace all 3,400 workers "as quickly as store directors are able," she said.
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Old 03-28-2007, 11:36 AM   #2
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RICHMOND, Va. (AP) "” Circuit City Stores Inc. said Wednesday it plans to cut costs by laying off about 3,400 retail workers, or 8.5 percent of its in-store staff, and hiring lower-paid employees to replace them. It is also trimming about 130 corporate information-technology jobs.

Its shares rose nearly 2 percent in afternoon trading.

Circuit City, the nation's No. 2 consumer electronics retailer behind Best Buy Co. Inc., said the store workers being laid off effective Wednesday were earning "well above the market-based salary range for their role." They will be replaced as soon as possible with employees who will be paid at the current market range, the company said in a news release.

"We are taking a number of aggressive actions to improve our cost and expense structure, which will better position us for improved and sustainable returns in today's marketplace," Philip J. Schoonover, Circuit City's chief executive, said in a statement.



Circuit City employs about 40,000 part-time and and full-time store employees, according to spokeswoman Jackie Foreman. Those being laid off will get severance packages and may apply for any open positions after 10 weeks, Foreman said.

The company plans to replace all 3,400 workers "as quickly as store directors are able," she said.
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Old 03-28-2007, 02:14 PM   #3
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Sounds like a wonderful place not to work.
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Old 03-28-2007, 05:40 PM   #4
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I thought that commission was the name of the game at Circuit City. If that is correct and the majority of those affected are earning higher than some pre-determined norm would it also not mean that they are in fact the ones bringing home the bacon.

Down the road I would not be surprised to hear this very same upper management complaining that the new lower paid retail staff is not selling at the level expected-duh!

Another case of management shooting themselves in the foot. Ken....
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Old 03-28-2007, 07:20 PM   #5
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There was just a big article about the new CEO of Home Depot apologizing to his customers for having done the same thing - released all of the trades people who used to staff the store and knew what they were talking about when you asked them questions. Now, he has his store managers out trying to "re-stock" their stores with ex-tradesman again.

I remember back in one of my management training sessions, one of the instructors said something that has always stuck with me: "you cannot save your way to profitability." Apparently the Circuit City CEO didn't get a chance to take the same class or, perhaps, didn't believe the message.

I used to be a big fan of the chain and did a lot of business with them. Like most other retail outlets, I think they had already stopped hiring anyone who knows anything about the products that they sell. I've made it a point now to never show up in a store trying to make a decision among several choices. If I haven't made my mind up before I arrive, I don't expect to get any truthful, accurate information after I walk through the doors. Circuit City used to provide that - that's why I bought from them.
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Old 03-29-2007, 03:36 AM   #6
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I was recently shopping for a new digital camera. One stop was obviously our local Circuit City. While looking at cameras I asked a salesperson which ones he carried that had specefic features I wanted. While we were talking, he walked away, to an unused register and started surfing the internet. It was just a pc with the register software on it. I thought maybe he was looking up camera info, so I followed him. He was just surfing. Had nothing to do with cameras or selling one. I just told him that it looks like he wasn't intersted in selling me a camera and walked out.
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Old 03-29-2007, 03:48 AM   #7
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Charlie,

I read in this morning's Houston Chronicle that Circuit City had already stopped paying commissions to their floor sales personnel. Maybe that somewhat explains the individual's attitude you describe.

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Old 03-29-2007, 07:25 AM   #8
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We're talking 3400 employees, that's less than 10% of their staff. Make sure you boycot Wal-Mart too. See below from yesterdays LA Times:

"The move put Richmond, Va.-based Circuit City, which has more than 40,000 employees in the United States, at the forefront of a new way of controlling labor costs in the service industry. Employers determine the prevailing market wages for particular jobs in various geographic regions and then find ways to make sure that their workers' salaries stay within that range.

Wal-Mart Stores Inc., for example, last summer capped the pay of its veterans at levels consistent with competitors' top wages. Wal-Mart didn't lay off those who earned above a certain amount but did stop giving them raises, saying that would encourage them to advance through the ranks to higher-paying positions."
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Old 03-29-2007, 07:56 AM   #9
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No need to boycot Wal-Mart, I never shop there or stay over night in their parking lots. Funny how in the good old USA we can justify the worst behavior as being OK. Both of these companies have shown the don't care about employees or customers.
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Old 03-29-2007, 08:02 AM   #10
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It would be interesting to figure out when employees moved from the "asset" to the "liability" section of most U.S. corporations' balance sheets.

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Old 03-29-2007, 12:41 PM   #11
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Rusty, the swap to "liability" for me came around '93 when we had massive rounds of layoffs and resources were plentiful. After that, they no longer value skills or experience. I've had two jobs now where, when I left the position, they replaced me with multiple people because they couldn't find someone else who had the range of skills that I do. I don't think that it is limited employees of corporations - insurance companies have tried to turn doctors into a "commodity", too, and even refer to them now as "providers". One provider is as good as another provider, in their eyes. Often the work as seen in its most simplistic terms and only through the direct measures of it that go on a report.

Like it or not, every industry seems headed to pay the lowest wage possible for that type of job - measured against any place in the world. Whether the person doing that job is capable of fullfilling the requirements doesn't seem to count for anything.
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Old 03-29-2007, 06:02 PM   #12
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And then they wonder why they can not get quality personnel? I know I will not work for nothing.

As for sales, commission has always been a great incentive!

Ken
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Old 03-29-2007, 09:22 PM   #13
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An article in todays local paper interviewed a guy who was lay off by CC. He was with the company for 19 years and was making around 20 an hour. He is 62 years old. Not only does he lose his job he loses his health insurance. He has some significant health problems and will probably be deamed uninsurable. He said that CC changed from commission to salary about five years ago. 8 people in his store were layed off the youngest being 22 so it isn't just the old timers getting the axe. I know I won't shop there anymore.
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Old 03-30-2007, 02:32 AM   #14
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">It would be interesting to figure out when employees moved from the "asset" to the "liability" section of most U.S. corporations' balance sheets. </div></BLOCKQUOTE>

It started in the 90's and is continuing. It is an Oriental Management Tool. It is call LEAN SIX SIGMA and is a way to reduce costs. It is used originally by the Car Manufactures to consolidate tasks and processes by combining them which normally means reducing your work force to save money. Also in Government accounting the work is a liability. When the government shows that they have reduced costs normally they have reduced the Government Labor Force, but hired contractor personnel to do the job. See on the spreadsheet, a contractor is counted (shown) as a "NON-LABOR Cost" and a Government Employee is shown as LABOR COST. Get the picture? No money is saved only changed from one costing column to another. You can find examples of this at almost any fast food place now, you enter and there are less employees and you wait longer for your order, because there are fewer people to process it. The big companies only care about profits and know that if you don't come back, someone else will.
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