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 ...
I suspect the entire retail industry operates on such a low margin that many of these big players are looking to drastically reduce -- if not eliminate -- their reliance on any sales staff. I can see a day in the not-too-distant future when consumers will have an expectation that retail stores that sell common products will operate like self-serve gas stations.
Still looking for a Palm Pilot. Any suggestions. I'm wary of buying online because of "return" hassles.
Had a similar experience, only on my way out the door I first found the store manager and let him know what happened and let him know that I would never set foot in HIS store again.
Check CC’s stock performance over the past six months - down close to 50%. The bosses’stock options are now worthless.
IMHO.. these corporations don’t understand while making those decisions ......is that people who work for a company have friends, relatives and acquaintances. Those people also have friends, relatives and acquaintances. When they see “a person” being treated in a shoddy manner... they will shop elsewhere out of loyalty or distaste. The repercussions are endless. Employees are not mere numbers on a piece of paper, but a viable and valuable asset.
my son bought a cell phone that is a computer also....this thing is awesome!!! it can do everything and more than a pda, all in one unit. he spent something like 600 bucks on it, but he can cruise the internet, keep his address book, hell, it even has stereo speakers built into it. and it is not very big at all...
Cutting your better paid sales people not only leaves you with poor quality on the floor, but also leaves you with no one with experience to train the newbies coming into the system.
Retail Sales has such a high turnover, so you have untrained and inexperienced people feeling their way blindly through the process, and in less than amonth or two, they are training the next batch... not a pleasant cycle.
Stepping over dollars to get to dimes.... same old story.
I've never had so much fun as raising my three boys.
Often, when they were very young, they would accompany me to some store that ignored my patronage. They were well behaved, and keenly attuned to the language of my subtle looks & gestures.
Once ignored for too long, all I need do was glance at them, and they would immediatly turn screaming hellions going three different directions across the store.
It never..never failed. I instantly had five people anxious to satisfy any/all of my shopping needs. God, I miss those days.
Ha-ha-ha-ha! Circuit City is so smart!
Of course corporate had all the right excuses, etc. but when you talked to the vendors that came by regularly the spiffs were still the same. Corporate however was cutting how much we were getting and pocketing the rest for other 'expenses' (namely that failed joke Divx they lost their tails on)
If the top level managers at Circuit City had selectively and quietly removed the worthless managers and employees, this problem would not exist. Some of those people would have been high paid, some not.
The real indication here is that higher management does not have a clue how to properly run a business. Invest in Best Buy.
I've always had this experience at Circuit City. The last time I tried to buy something there was about 10 years ago. I've always thought that somehow, in that store, I was invisible.
Business and consumer economics commentator Bruce Williams has said it many times: “Your best salesman should be your highest paid employee.” And he meant higher paid than management if that person is contributing more to revenue.
Seems that while competition in large screen TVs grew more fierce CC got rid of the folks that were best at moving that product line. Penny wise.
Well their sales are off by 80%.
When they took over I told them what they needed to do to boost sales but they were college trained and they didn't listen to me.
I went to a rival company and they snapped at the chance to boost their sales and I am making twice the money.
I won't shop there because I've been burned too many times by their rebate scams.
A experienced, highly knowledgable employee who is well paid is an asset, not a liability.
Back in the early 90’s, I worked for Motorola in Huntsville, Alabama. This was a non-union facility, so the people who were retained long-term were good employees.
They decided they needed to move all of the 15-20 year employees (you know, the ones who know how everything works and where everything is and how to build ALL the products) out of the production area and go to contract/temporary labor to staff the production lines.
We cut costs. Of course, the engineering support staff was CRUSHED with an unbelievable work load. We basically had to prepare every work station for a 5th grade level employee. And when you had a screw up, it usually was a HUGE screwup because the people who would have immediately recognized it were “too expensive” to be working in that area.
After a few years of that, the plant closed.
Circuit City didn’t shoot themselves in the foot, they shot themselves in the head.
Home Depot is just as bad in my experience.
Circuit City won’t get any business from me due to this decision.
Terrible, isn't it. Our local True Value is thriving. The employees know me (and all their regulars) and they always help me find what I need. Amazing how good salespeople generate good business.
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