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Circuit City's Job Cuts Backfiring, Analysts Say
wahington post ^ | 5-2-07 | Amy Joyce

Posted on 05/02/2007 5:08:03 AM PDT by Hydroshock

Circuit City fired 3,400 of its highest-paid store employees in March, saying it needed to hire cheaper workers to shore up its bottom line. Now, the Richmond electronics retailer says it expects to post a first-quarter loss next month, and analysts are blaming the job cuts.

The company, which on Monday also revised its outlook for the first half of its fiscal year ending Feb. 29, 2008, cited poor sales of large flat-panel and projection televisions. Analysts said Circuit City had cast off some of its most experienced and successful people and was losing business to competitors who have better-trained employees.

Circuit City expects to report a loss for the first quarter because of poor sales of expensive televisions, which often require experienced salespeople. (By Steve Helber -- Associated Press)

From The Post's Print Edition All of Today's Business Articles Today's Business Front Image

"I think even though sales were soft in March, this is clearly why April sales were worse. They were replaced with less knowledgeable associates," said Tim Allen, an analyst with Jefferies & Co.

In particular, the televisions showing disappointing results are "intensive sales" requiring more informed employees, Allen said. "It's a big-ticket purchase for somebody. And if they feel like they're not getting the right advice or are being misled by someone who doesn't know, it would be definitely frustrating. They will take their business elsewhere."

Circuit City said in March that sales would be volatile for the next several months as the company adjusts to the changes. But yesterday the company said it was too early to tell whether the dismissals had caused any of the falloff in April sales b

(Excerpt) Read more at washingtonpost.com ...


TOPICS: Business/Economy; Miscellaneous; News/Current Events
KEYWORDS: circuitcity; stupid
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1 posted on 05/02/2007 5:08:05 AM PDT by Hydroshock
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To: Hydroshock

Once again, bean counters making decisions that are contrary to good business practices.


2 posted on 05/02/2007 5:11:28 AM PDT by RSmithOpt (Liberalism: Highway to Hell)
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To: Hydroshock

So you get rid of your most productive workers and wonder why things are not going so well. Maybe Circuit City should outsource all their sales jobs to India to save even more money before they shut the doors for good.


3 posted on 05/02/2007 5:11:52 AM PDT by pikachu (Breakfast is the most important beer of the day!)
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To: Hydroshock

I’ve employed people all my life. For the most part you get what you pay for.


4 posted on 05/02/2007 5:12:11 AM PDT by Last Dakotan
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To: RSmithOpt

What most people do not know, or do not want to admit, is that a company lives or dies with it’s sales force. You cannot stay in business if you do not sell anything.


5 posted on 05/02/2007 5:13:41 AM PDT by joe fonebone (Nothin' from Nothin' leaves Nothin')
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To: pikachu

I went in last month fully intending to walk out with a big screen plasma TV, and after a half hour of no one speaking to me, I walked back out empty-handed.


6 posted on 05/02/2007 5:13:52 AM PDT by babble-on
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To: Hydroshock

Sears did the same thing in the ‘70s. Shot themselves in the foot.


7 posted on 05/02/2007 5:15:39 AM PDT by Vinnie (You're Nobody 'Til Somebody Jihads You)
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To: Hydroshock

About two weeks ago I went to the nearest Circuit City store, found what I wanted on display and decided to buy it. There wasn’t a boxed item on the shelf. I looked all over the store and couldn’t find an employee to help me. As I was leaving a young woman standing at the door asked if I found what I wanted. I told her that I was leaving because I couldn’t find help. I don’t know if this is typical but in this case CC lost a sale.


8 posted on 05/02/2007 5:15:48 AM PDT by FreePaul
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To: babble-on

My wife and I went to a new one a 1/2 mile from our house, we could nto find a Harry Potter DVD, we asked them were it was, their inventory said they had it, but the manageer could nto even tell us what section it was in.


9 posted on 05/02/2007 5:15:51 AM PDT by Hydroshock (Duncan Hunter For President, checkout gohunter08.com.)
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To: Hydroshock

Not only is the loss due possibly to poorly trained staff. A lot of people who normally shop at Circuit City didn’t like these firings and have chosen to buy elsewhere.


10 posted on 05/02/2007 5:16:09 AM PDT by randita
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To: Last Dakotan
For the most part you get what you pay for.

That's one of the fundamentals of Capitalism...

11 posted on 05/02/2007 5:16:34 AM PDT by Zeppelin (Keep on FReepin' on...)
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To: RSmithOpt
They jumped the gun a few months ~ maybe as much as a year.

High ticket television sets are rapidly turning into ordinary consumer products with much lower prices.

I recall that a 26 inch TV 50 years ago cost over $300. With a remote that might jump to $350. An equivalent cost today would be about $4,000.

That was a serious purchase in its time ~ $400 for a far larger thin screen projection TV is not so serious now.

A DMD device should cost less than $100 given its lack of complexity BTW.

12 posted on 05/02/2007 5:17:05 AM PDT by muawiyah
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To: RSmithOpt

I’m betting the boss is one of the higher paid people. Time for him to go!


13 posted on 05/02/2007 5:17:15 AM PDT by Brilliant
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To: joe fonebone

duh! Circuit City’s problems arise from their business practices of pushing meaningless extended warranties they never honor without contacting the BBB or state attorney’s office, plus the bait and switch tactics used for years. This is the main reason for their sales drop IMHO. Their employees are generally knowledgeable and helpful but are forced to up sell BS.


14 posted on 05/02/2007 5:18:06 AM PDT by RSmithOpt (Liberalism: Highway to Hell)
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To: Hydroshock
I’m not a union guy by any stretch, but this is the second time the corporate bean counters at Circuit City hosed their employees. If that’s how they treat their employees, I really don’t want to help facilitate that.
15 posted on 05/02/2007 5:18:24 AM PDT by Obadiah (Republicans - the battered wives of Democrats.)
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To: Hydroshock

The last few times I’ve gone into Circuit City, I’ve seen the employees acting like they don’t give a rip what happens in the store. It’s more like a party venue that happens to sell electronics.

They’d have done better if they got rid of the lower-paid employees, kept fewer of the highly paid ones, and concentrated on a more professional atmosphere.


16 posted on 05/02/2007 5:18:39 AM PDT by SlowBoat407 (Applewood smoked bacon is the new chipotle.)
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To: Hydroshock

Not to mention those of us who stopped shopping there because it was such a crappy thing to do.


17 posted on 05/02/2007 5:20:10 AM PDT by nina0113
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To: Hydroshock

Morons!


18 posted on 05/02/2007 5:20:20 AM PDT by mad_as_he$$ (NSDQ)
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To: pikachu
So you get rid of your most productive workers and wonder why things are not going so well.

A very good friend of mine is a mid-level manager in a public sector agency (he works for the state). While getting ready to counsel a lackluster employee one day, he ran cost/benefit analyses on the employee in question, and then on other employees, ones who were doing well. The results intrigued him, so he expanded the study to a large subset of the people who report to him.

He found that, without fail, his highest-paid people provided the best return for their salary...and not just overall, but on a per-dollar basis too.

I told him "Good. Those people are where you want to invest your payroll dollars."

He started as though something had struck him. "You're right," he finally said.

19 posted on 05/02/2007 5:20:24 AM PDT by Oberon (What does it take to make government shrink?)
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To: muawiyah

I remember those days well. Our first color TV was and RCA 25” console with a remote bought in 1966 for $250...... 1/2 months average pay then.


20 posted on 05/02/2007 5:20:41 AM PDT by RSmithOpt (Liberalism: Highway to Hell)
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To: RSmithOpt
Once again, bean counters making decisions that are contrary to good business practices common sense.

After spending a good deal of time in the corporate world, I came to the conclusion if the typical accounting grad student spent more time gettin' some lovin', or at least getting drinks, then none of this would ever happen.

21 posted on 05/02/2007 5:21:12 AM PDT by 1rudeboy
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To: Last Dakotan
...you get what you pay for.

One advertiser on a local radio station modifies that to "You get what you pay for, if you're lucky." Probably words such as cautious, careful, etc. could be substituted for lucky.

22 posted on 05/02/2007 5:21:34 AM PDT by FreePaul
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To: Hydroshock
Circuit City fired 3,400 of its highest-paid store employees in March...

Who in their right mind would want to work for such a company? And if you did work for such a company why would you try to do a good job? If you do a good job you get a raise. If you get a raise, you get fired.

23 posted on 05/02/2007 5:22:35 AM PDT by P-Marlowe (LPFOKETT GAHCOEEP-w/o*)
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To: Hydroshock

Serves them right for being greedy.


24 posted on 05/02/2007 5:22:50 AM PDT by Ghost of Philip Marlowe (Liberals are blind. They are the dupes of Leftists who know exactly what they're doing.)
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To: Hydroshock

Gee, this is a tough one. Could the retail business possibly have something to do with the quality of customer service?

Note to whatever CEO might be reading this: Your most valuable assets walk out the door at 5:00 pm, then place themselves in a steel and glass box with a controlled explosion in front of them and highly flammable liquid behind them in order to hurtle down the street at 60 mph.


25 posted on 05/02/2007 5:23:17 AM PDT by durasell (!)
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To: babble-on
I went in last month fully intending to walk out with a big screen plasma TV, and after a half hour of no one speaking to me, I walked back out empty-handed.

I was in a Best Buy just last Sunday looking for a computer. I asked one "kid" (all the sales people looked like they were under 23) for help, and he told me I would have to go over to the other counter (he remained standing, doing nothing, by the software). I went to the counter and waited 20 minutes. Nothing. I walked out. I'm going to buy the computer on-line.
26 posted on 05/02/2007 5:27:10 AM PDT by HaveHadEnough
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To: Hydroshock

Not unlikke replacing American workers with lower paid illegals.


27 posted on 05/02/2007 5:29:47 AM PDT by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
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To: P-Marlowe

“you do a good job you get a raise. If you get a raise, you get fired.”

That happens at a lot of companies, like some weird version of the Peter principle. It really does pay do be very average often. Places looking to reduce costs will often look at who makes the most and and start the cutting there. It sucks.


28 posted on 05/02/2007 5:31:58 AM PDT by Tolsti
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To: RSmithOpt
Once again, bean counters making decisions that are contrary to good business practices.

Yup. See it often at work. Apple seems to be the only company that escapes this trap.

29 posted on 05/02/2007 5:34:49 AM PDT by Aquinasfan (When you find "Sola Scriptura" in the Bible, let me know)
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To: RSmithOpt; muawiyah

The price of things may go up over time, but the value does not. In George Washington’s time, a gold coin, about an ounce, would buy you a nice tailored suit of clothes. Today, an ounce of gold is around $675 an ounce, or about the price of a nice tailored suit of clothes............


30 posted on 05/02/2007 5:35:03 AM PDT by Red Badger (My gerund got caught in my diphthong, and now I have a dangling participle...............)
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To: Hydroshock

CC started going downhill a few years ago, when they eliminated washers, dryers and refrigerators from their stores. These common items increased traffic, even though they were low margin. Now everything is low margin, I think.


31 posted on 05/02/2007 5:35:06 AM PDT by pleikumud
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To: Hydroshock

Whoever was behind the dumbest corporate move I’ve heard of in a long time, should be named and held up for riducule.


32 posted on 05/02/2007 5:36:16 AM PDT by tkathy (Those who appease always get more killed than those who stand up to barbarism)
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To: FreePaul
There wasn’t a boxed item on the shelf. I looked all over the store and couldn’t find an employee to help me. As I was leaving a young woman standing at the door asked if I found what I wanted. I told her that I was leaving because I couldn’t find help. I don’t know if this is typical but in this case CC lost a sale.

Same thing happened to me at BJs. An unskilled salesperson would be a step up from no salespersons.

33 posted on 05/02/2007 5:36:59 AM PDT by Aquinasfan (When you find "Sola Scriptura" in the Bible, let me know)
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To: Tolsti
Places looking to reduce costs will often look at who makes the most and and start the cutting there. It sucks.

It sure does..........Happened to me once.........Worked for a place 10 years, worked my way up to a mid level management position, company got in financial straights (ie, they weren't selling anything), and so they "let go" of all their highest paid workers. And of course, we were the ones that had been there the longest, some 20 years or more..............The company did not last long after that, they were bought out......

34 posted on 05/02/2007 5:39:36 AM PDT by Red Badger (My gerund got caught in my diphthong, and now I have a dangling participle...............)
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To: Aquinasfan
Apple has already completely destroyed itself. Back when computer parts/technology first became amenable to mail order sales, Apple opted out of that opportunity by canceling all of its dealers who sold anything by mail.

The consequence was the total destruction of their dealership network and the loss of all of their knowledgeable people in the sales force.

They've subsequently accepted bribes/donations from Microsoft and others just to keep the Apple logo on the market.

Circuit City would have been well advised to see what happened to Apple shortly after their remarkably stupid mail order decision.

35 posted on 05/02/2007 5:39:46 AM PDT by muawiyah
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To: babble-on
I went in last month fully intending to walk out with a big screen plasma TV, and after a half hour of no one speaking to me, I walked back out empty-handed.

You probably wouldn't have walked out with a plasma TV if some one HAD waited on you. When we were shopping for our plasma, we went to CC. We were waited on by a very competent and knowledgable young man who knew his stuff. We decided on the TV we wanted and were told it would be at least two weeks for them to get one in from the warehouse. We walked out and went to Sams where we got the one we wanted for less money and took it home the same day.
36 posted on 05/02/2007 5:39:53 AM PDT by YellowRoseofTx
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To: YellowRoseofTx

Must be that “just in time” inventory management I keep hearing about.


37 posted on 05/02/2007 5:41:56 AM PDT by listenhillary (Islamofacists are playing our media like a virtuoso)
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To: SlowBoat407

Try the CC in Winchester VA.
It’s populated [almost] entirely by Goth-types and other kids with flourescent hair.

They will literally take you by the hand and lead you to whatever you’re looking for, often with several others tagging along, just in case.


38 posted on 05/02/2007 5:42:54 AM PDT by Salamander (And don't forget my Dog; fixed and consequent.......)
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To: tkathy

Yep, once agin US business looks only to the next quarter.


39 posted on 05/02/2007 5:43:12 AM PDT by Hydroshock (Duncan Hunter For President, checkout gohunter08.com.)
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To: pleikumud

Circuit City couldn’t compete with Lowes and Home Depot in selling that type of stuff. You only have a limited amount of space in your store; why take up a significant amount of space with a product that you can’t move?

I never liked Circuit City because lots of the products have the old-fashioned checkout, where it has to be pulled from the back of the store. Annoying. Anyway, it seems like all these electronics store—other than Best Buy—are on their way out, anyhow.

Circuit City needed to take drastic steps to stay in business, so it took a big gamble. I guess it didn’t pay off, but I can’t blame them for trying. That’s the way it goes.


40 posted on 05/02/2007 5:43:18 AM PDT by Publius Valerius
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To: Hydroshock

Wow, what a shock.

Lesson number one in Remuneration 101

You pay peanuts, you get monkeys.


41 posted on 05/02/2007 5:45:11 AM PDT by cyclotic (Support Scouting-Raising boys to be men, and politically incorrect at the same time.)
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To: pikachu

What they did was fire all of the commission sales people and hire hourly workers that know almost nothing about how to sell or the products.

What they lost was the sales the good salespeople closed that would have walked otherwise.


42 posted on 05/02/2007 5:45:22 AM PDT by stockpirate (Al Qaeda is in the United States, they are in the House and Senate, Democrats all!)
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To: Last Dakotan
For the most part you get what you pay for.

Amen! Like that saying goes: "A worker is worth his wages." You hire minimum wage, you get minimum wage results.

43 posted on 05/02/2007 5:46:01 AM PDT by yankeedame ("Oh, I can take it but I'd much rather dish it out.")
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To: Hydroshock
Yep, once agin US business looks only to the next quarter.

When you are only a handful of quarters from bankruptcy, the near-term seems pretty important.

44 posted on 05/02/2007 5:46:22 AM PDT by Publius Valerius
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To: YellowRoseofTx

*And* you have a 90 day return policy with Sam’s.

CC has 30 days and I went through *4* plasmas from there, 2 from Sam’s and then finally a 42” LCD from CC before I got one that wasn’t defective or became defective quickly.

Right after Christmas, I bought a 32” Sharp Aquos LCD from CC on clearance.
It was a $1500 monitor for $600.
I’m using it as a PC display via the HDMI input.

[it -kicks-!]....:))


45 posted on 05/02/2007 5:47:45 AM PDT by Salamander (And don't forget my Dog; fixed and consequent.......)
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To: babble-on
I went in last month fully intending to walk out with a big screen plasma TV, and after a half hour of no one speaking to me, I walked back out empty-handed.

LOL! Where'd you go...Lowes? It's like trying to find a needle in a hay stack trying to find someone -- anyone!-- to help you there.

46 posted on 05/02/2007 5:49:07 AM PDT by yankeedame ("Oh, I can take it but I'd much rather dish it out.")
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To: yankeedame

Keep hitting the “HELP” buttons installed in every department.

After 6 or 7 “Customer Assistance Please....!!!” alerts bellowing over the store speakers in rapid succession, *someone* will come, if only to tell you to knock it off....;D


47 posted on 05/02/2007 5:51:59 AM PDT by Salamander (And don't forget my Dog; fixed and consequent.......)
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To: Hydroshock
Moreover, when I have gone to CC's website, my computer goes goofy going back two pages instead of one, and when dragging down my toolbar the toolbar doesn't stay.

Then hafta Run msconfig to dump whatever they plant in startup menu.

48 posted on 05/02/2007 5:52:59 AM PDT by 100-Fold_Return (MY GOSH!! That's too CHEAP!!! :>)
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To: joe fonebone

I had a friend of mine who used to work as a salesman for Circuit City years ago. He made good money but that was because he generated good sales.


49 posted on 05/02/2007 5:57:11 AM PDT by PJ-Comix (Join the DUmmie FUnnies PING List for the FUNNIEST Blog on the Web)
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To: HaveHadEnough

Best Buy is the store I hate the most. You cannot just walk through the store without being accosted by employees asking, “Did you need help finding anything?” “Can I help you?” “What can I help you with?” The last time we went there, we were in the store less than 15 minutes and were asked by 4 employees if there was anything they could help us with. Very irritating.


50 posted on 05/02/2007 5:59:10 AM PDT by FarRightFanatic ("I'm Barack Hussein Obama...and I approved this taqiyya.")
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