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?