Why is it, that despite numerous studies by people like McKinsey that show when companies continue to cut their staff and their services, they're generally on the slippery slope to being out of business, that companies continue to cut their staff and their services? Let's see, you're in a commodity business, selling commodity products and you're surprised that you're not making as much money as you'd like. So, the brilliant plan, make yourself more of a commodity. Yea, fire all of your employees and higher lower paid people who can't service your customers.
Then, as I heard on a news report on NPR, give those fired employees a chance to reapply for their old jobs as lower wages, so you have a really happy and enthusiastic work force. Why don’t you just close the business now and move on. Oh, that’s right, while you’re laying off all of those messy store employees, you still get you big paycheck. So sure, the company may be run into the ground , but you’ll probably make a couple of million before the lights go out. Yep, another smart, management move that won’t actually solve the problem.
Richmond, Va.-based Circuit City Stores Inc. announced plans to lay off 3,400 store associates after completing a wage management initiative. The lay-offs will focus on employees who "were paid well above the market-based salary range for their role," the company said, adding that new associates will be hired for these positions and compensated at the current market range for the job. "We are taking a number of aggressive actions to improve our cost and expense structure, which will better position us for improved and sustainable returns in today's marketplace," said Philip J. Schoonover, chairman, president and CEO of Circuit City. The company also is trimming about 130 corporate information-technology (IT) jobs and has hired Goldman Sachs to explore strategic options for a possible unit sale of InterTAN Inc., the Canadian retailer it acquired in 2004. Circuit City will outsource its IT infrastructure operations to IBM. About 50 of Circuit City's 130 internal IT infrastructure workers will join IBM and remain on site, while the other 80 will eventually be cut. Additionally, the company's international segment closed 55 stores in February 2007 and expects to close approximately 10 more stores in the first half of fiscal 2008.
Link: Circuit City to Lay Off 3,400 Employees.