Skip to comments.Circuit City's Job Cuts Backfiring, Analysts Say
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 ...
Wow, what a shock.
Lesson number one in Remuneration 101
You pay peanuts, you get monkeys.
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.
Amen! Like that saying goes: "A worker is worth his wages." You hire minimum wage, you get minimum wage results.
When you are only a handful of quarters from bankruptcy, the near-term seems pretty important.
*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.
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.
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
Then hafta Run msconfig to dump whatever they plant in startup menu.
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.
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.
Oddly enough, about ten years ago I bought an Apple computer at Circuit City. It was the demo box on the floor, almost the last Mac in the store. Apple had cut them off.
Every retailer pushes extended warranties. It’s the most profitable non-product in the store. Money for nothing.
What I hate even more with best buy is that they do not back their products. you can buy a laptop, take it to your car in the parking lot, find out it does not work ( happened to a friend of mine ) take it back to the store, literally 10 minutes after you bought it, and they will not exchange it or take it back, but they will send it out for repair ( minimum wait time is 6 weeks ) i will never buy anything from them
> 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.
What a shame! I haven’t been to Circuit City since the XMas rush. It was the *only* store where a salesman, cheerful and knowledgeable, came up to help me in under 30 seconds.
“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.”
I just went into our newly built Lowe’s a few weeks ago. Every sign, and I mean EVERY sign, in the store is in English AND Spanish.
Must be the same guys that ran “Service Merchandise”.
I'm one of those people. I know its fashionable to crap all over your fellow American, especially if he or she works for a living and makes a decent wage doing it, but I won't support Circuit City's move.
One time, when I was on vacation, I went into a Circuit City to buy something and everyone I talked to or asked for help looked at me like I was speaking a foreign language or something. Then I remembered I was in Mexico.
I’ve heard that from other people, too. DH bought a stereo there, the face of it went completely dark, stereo still played music, you just didn’t know what you were going to play. He went into the store and tried to return it and they refused. They sent it off to be repaired and it just got back a few days ago.
We bought our 65” big screen from them 2 years ago, purchased the extended warranty to cover cleaning of bulbs, replacement of bulbs, etc. Getting someone out here to take care of any issues with the TV practically takes an act of Congress! I am usually a pretty pleasant person, but I’ve had to get really nasty with a few of their people.