Circuit City to Fire 3,400, Rehire Cheaper Workers

[loose passive]

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Circuit City to Fire 3,400, Rehire Cheaper Workers

By Mark Clothier

March 28 (Bloomberg) -- Circuit City Stores Inc., the second-largest U.S. electronics retailer, will fire 3,400 sales people and replace them with employees willing to work for less.

The company, which reported its first loss in six quarters in December, is eliminating jobs that paid ``well above'' market rates. Those who were fired can apply for the lower-paying jobs, company spokesman Bill Cimino said today.

Circuit City, based in Richmond, Virginia, also hired Goldman, Sachs & Co. to study a sale of its 900 Canadian stores.

The moves will reduce 2008 expenses by $110 million and trim $140 million in annual spending in 2009. Sales may be volatile during the first half of this year as the new sales people transition in, the company said today in a statement.

``Firing 3,400 of arguably the most successful sales people in the company could prove terrible for morale,'' Colin McGranahan, an analyst with Sanford Bernstein & Co., wrote in a note today. ``The question remains as to whether Circuit City can rebuild in time for the all-important holiday season.''

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Would you go back and work for this company after they pulled this?

[Nick B.]

The walmart in my city just fired all their managers and rehired them at lower salaries.

[z28dreams]

Circuit city already did this once about 3-4 years ago.

Basically, when everyone was on commission, they laid off all of the people that were "costing" them the most.

Of course, these were the people that were also selling the most.

Sheer genius.

This time around though the higher salaries will mostly just be people who have been around the longest, not necessarily the best salesmen.

[TheNoodleMan]

The Circuit City in my area went out of business around 2 years ago, roughly 6 months after Best Buy built a store across the street with a better selection and cheaper prices. I assume this is happening all over.

[guids]

Wow, a big company trying to make a profit, I cant believe it. I cant blame them, so I wouldnt be really bitter about going back.

[4 High]

CC redid their store by me recently and now it looks even worse then before. CC used to be a good place to find somewhat rare DVDs and CDs but i havent bought anything from them in a long time.

[WayAbvPar]

If I was one of the folks laid off and then offered a lower salary to come back, I would probably end up with a rap sheet for arson after every Circuit City within 50 miles of me mysteriously burned to the ground.

[gamblore99]

ya, if I were one of those employees, I would come back but not make any effort unless it related to making money from sales. I would probably steal and ignore customers.

[wdcbooks]

I was once part of a group of fifty employees. We were fired by a pre-recorded conference call. Five minutes after the conference call was over my manager called and said they were rehiring a few people and offered my a significantly higher salary than I was making before. I felt like I was in Office Space.

I took the job and did absolutely nothing while I looked for a better job and still have no idea what their motivation was.

[Hopey]

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ya, if I were one of those employees, I would come back but not make any effort unless it related to making money from sales. I would probably steal and ignore customers.

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Sounds like you'd be better suited to working at Best Buy. [img]/images/graemlins/smile.gif[/img]