This is similar to actions that Circuit City took which wound up greatly acceleraing it's downfall ...
Circuit City fired and replaced their experienced salespeople who were earning more, with new, less experienced people at minimum wage . Which turned out to be exactly the wrong thing to do at the time. Probably the wrong thing to do at ANY time.
Best Buy actually reported decent results , considering the world economy, the past quarter.
Now it's gonna fire 1000 assistant store managers? This is a typical corporate reaction, layoffs ... who knows what the effect will be, but probably not much for the future growth and health of the company. Just standard operating procedure.
But decreasing the salary of 'Senior Sales Associates' by 25-50% (YIKES!!) .... this is similar but MUCH worse than the Circuit City action ... they have decided not to fire their experienced people but instead keep them around at newbie wages ....
In today's economy it may be that those affected will have to grin and bear it as there are not many job alternatives out there. But, for the medium and long-term effects on Best Buy once the economy comes back, this has got to be a gigantic negative .
I would think that they will suffer the 'Circuit City effect' within the next year if this report is true.
April 16, 2009
Best Buy Cuts Wages, Jobs in Its Stores
By THE ASSOCIATED PRESS
Filed at 7:31 a.m. ET
RICHFIELD, Minn. (AP) -- Thousands of Best Buy store employees will see pay cuts and others will lose their jobs as the consumer electronics chain reorganizes.
Best Buy Co. Inc. would not disclose the number of people affected. A spokesman said the move will put more sales people in front of customers. Many store managers and senior-level sales people will go to jobs where they'll interact more directly with shoppers.
New York investment firm Sanford Bernstein said in a research note Wednesday that as many as 1,000 assistant store managers would lose their jobs. Up to another 8,000 senior sales associates would be demoted to jobs paying 25 percent to 50 percent less.
The numbers are estimates by Sanford Bernstein. Best Buy won't confirm or deny them.