Circuit City is firing 3,400 employees (8% of Circuit City's total work force) and bringing in lower-cost workers to fill their roles. The company says that the move is aimed to help realign its cost and expense structure. The move comes after Circuit City announced in February that it was closing 62 stores in Canada along with seven underperforming stores in the United States. Employees will be given four weeks’ worth of severance pay and will have the option of reapplying for their positions at a lower pay grade after a 10-week hiatus. Circuit City also plans to outsource its IT infrastructure operations to IBM in order to reduce costs by roughly 16%. This separate move will affect an additional 130 employees - 50 of which will become IBM employees while the other 80 will be fired.
"These actions represent the execution phase of the work initiated this winter to accelerate Circuit City's transformation. We expect to deliver improvements in our selling, general and administrative expense rate while maintaining appropriate investments to drive our key strategic initiatives such as digital home services, multi-channel and home entertainment. Unfortunately, a number of Associates are directly impacted by the actions, but we are making Circuit City stronger for the long term," said Philip J. Schoonover, chairman, president and chief executive officer for Circuit City.
News source: DailyTech
"These actions represent the execution phase of the work initiated this winter to accelerate Circuit City's transformation. We expect to deliver improvements in our selling, general and administrative expense rate while maintaining appropriate investments to drive our key strategic initiatives such as digital home services, multi-channel and home entertainment. Unfortunately, a number of Associates are directly impacted by the actions, but we are making Circuit City stronger for the long term," said Philip J. Schoonover, chairman, president and chief executive officer for Circuit City.
















if you earned it they should have 0 right to fire you cause your making to much
Im from the UK and i dont know anything about circuit city but i thought they were a Electronics Retailer?
And pyehac, unless she's been there for a LONG time and is making over the cap for her position, she's fine.
Nope does not work that way here, and a lot of states are "at will" states. Meaning if you are about to quit you are expected to give 2 weeks notice, but if they want to fire you at anytime for any reason they can.
Just another big business doing what they do best, stepping over the little guys to please shareholders and increase CEOs pay checks so they can buy another Ferrari or maybe make sure that Little Sarah gets the new Benz she has been wanting for her 16th Birthday. This is the way big business works in America though, and since the big boys have the money to snuggle up with the lawmakers that's the way it will stay.
Exact opposite here which is why companies like Enron could run wild for so long before finally being punished and taken down more of the little guys with them. Big business has the money and the power to lobby the lawmakers, and congressmen. A couple of lobster dinners here, a suprise package with an all inclusive vacation there, and like magic you can do whatever you want.
Can we get Eddie Giffith to make a visit to every CEO and have him drive their car?
Nope does not work that way here, and a lot of states are "at will" states. Meaning if you are about to quit you are expected to give 2 weeks notice, but if they want to fire you at anytime for any reason they can.
>>>>
At will means that you or the employer may termintate at any given time. Of course employers WANT you to give two weeks, but you are in no way obligated to do so.
We're supporting UK users and actually based in the UK (a first for Microsoft), but eventually Microsoft figured we were costing them too much. The fact our customer satisfaction ratings have been the highest ever didn't even come into their decision.
JobCentre, here I come.
There's a loophole for everything
I'm not sure he's even talking about the same things. Sounds like he's just being laid off.
What??? If their goal is to reduce costs and if an overpaid employee is willing to work for less then why not just cut his pay and be done with it? It sounds like they are trying to cut some fat in the process.
You can lower someone's pay. (Wife is CFO and in charge of her office's HR) But if you do that... the person generally will quit or do worse work... they tend to get disenfranchised... aka "why should I put in ANY effort for this money", vs the new employee is happy to get the new job. (theoretically)
As for me, I stopped going to CCity years ago, the sales people were frickin sharks.
As for me, I stopped going to CCity years ago, the sales people were frickin sharks.
Well, then that makes sense as well, though it sucks for the employees.
And they're not going to be sharks anymore... CC is no longer commission-based. In my experience, as I worked there for about 2 and a half years, now that they're not commission-based, they're a hell of a lot better at sales than they were before.
But I just don't understand how these guys pay got up to 18 dollars an hour. The only thing worse than these stores (circuit city, compusa, best buy etc) customer service is their return policy.
edit: ugh, i dont want my typing to turn into ads for those bad business companies!
Last edited by Imnotrichey on 29 Mar 2007 - 20:37
I hope all Circuit City employees (and those of other retailers) will organize a large national boycott. The anti-worker sentiment in America is disgusting. It's time we start firing the real over-paid workers in America: corporate executives and other capitalist pigs.
CCity employee - overpaid compared to the market place, laid off, can re-apply for job at market value.
XYZ employee - underpaid, laid off, has to find entirely new line of work, as XYZ & their competitors are now outsourcing those positions overseas.
I'm definitely not trying to be a Circuit City apologist, because it is indeed a crap move, but looking at recent trends in other areas, CCity doesn't come off as bad imho.
This is something we've been seeing in the US for the past 3-4 decades -- corporate loyalty to their employees -- it nolonger exists. The story I saw this morning on GMA was that of a man who had been employed by CCity for 20 years -- 20 years -- yes he should be making 18 an hour and not 10-13. We are talking about adults with families and homes not 17-21 year old kids that still live at home with their parents and have little to no financial responsibility. That is one of the main reasons also that employees are always on the look out for a better position then what they have now because you never know when you're going to be looking for another job -- so in essence even if you are employed -- you NEVER stop looking.
This is indeed the first time I've ever heard of a company laying off people because they are making too much. We were not frequent shoppers at CCity and now I'm going to be an even less frequent shopper -- we only purchase DVDs and music from them anyway -- I can order those online from Amazon.
If they wanted to cut salaries -- how about starting at the stop and work your way down. CCity is practicing what is termed "top-down management" -- where the decisions are handed down from the top.
if so, thats bull sh**. i'm sure your not allowed to do this in Canada.
if so, thats bull sh**. i'm sure your not allowed to do this in Canada.
I don't think it's allowed either.
I never saw a Circuit City in Canada, perhaps they are referring to The Source CC?
if so, thats bull sh**. i'm sure your not allowed to do this in Canada.
I don't think it's allowed either.
I never saw a Circuit City in Canada, perhaps they are referring to The Source CC?
yea they are referring to, although the source is a joke as it is. Circuit City bought the name, not the store, InterTan still makes the products. (same products radio shack had but different packaging.)
I'm not saying this is right, and I'm not defending CC in any way; I mean, I got out of there for a reason. But when they say over-paid, it's true. It's not just some arbitrary amount they made up and said anybody over that is over-paid.
In turn it promoted laziness since they were already earning the cash even without having to sell anything.
Guess they should have brought in the Bob's and seen who was worth their money rather than making such a grand decision, but I guess it's easier and cheaper.
Having said that, I've been a Best Buy employee for over 2 1/2 years and I must say, that is the retailer to work for. They give very generous discounts to their employees as well as a wealth of other benefits that may please many. At least Best Buy is making the effort to hire people and pay them adequately for their job and at least in my store, they don't hound customers around literally forcing them to grab onto a credit brochure.
Having said that, its nice to see Circuit City digging their future grave with this move.
But think about it. When someone gets a job, they have the ambition to work for a raise but what will this move by CC do to job seekers? That if you get hired don't be expecting a raise but you have to work as hard as you can?
Good luck with that, Circuit.
or people won't want a raise cause they'll get fired because they will be considered overpaid
"congratulation johnson, you had a great year. You deserve a 10% raise."
"No thanks, I don't want to get fired for being overpaid"
or people won't want a raise cause they'll get fired because they will be considered overpaid
"congratulation johnson, you had a great year. You deserve a 10% raise."
"No thanks, I don't want to get fired for being overpaid"
lol that's pretty much the inside joke now. nobody wants a raise.
But remember, you get what you pay for. If you've had employees with your corporation for years and they really know what they are doing they are going to represent the company better, treat the customers better, and move more product. (Hence you are getting a better return for that higher wage you're paying) However, if you fire them and hire new people that means you have to spend the time and money to train them and since they are new they know less about the corporation and products and won't sell as much. But hey you're saving a couple bucks and taking more home yourself so its a good thing, right?
+1 (for your comment)
So you would rather have EVERYONE at Circuit City lose their jobs? Why don't you give it some thought and figure out how much it would cost to keep all those underperforming stores open and how much it would cost to save all those jobs. Compare that to what the execs make. Stop making ignorant statements without thinking.
+1 (for your comment)
You think people in those executive roles didn't work hard to get there? Think they don't still work hard? They have stockholders to report to, and everyone's jobs depend on them. No pressure, right? I suppose people that work hard to get someplace high and deal with copmplex problems shouldn't be paid any more than anyone else. Come into the real world and put yourself into their shoes before making baseless, classist remarks.
I feel sorry for those affected, it's the CEO's that should be taking the pay cut, eliminate middle management and cut the CEO's salary by 40%.
And when you shop there, it shows.
so basically you have a situation at CC now where they have got rid of all the people who were skilled and actually knew what they were talking about and the one who trained the people there.
and to further add insult to injury, they sent a company wide email that basically said they had openings now and were going to be doing some hiring in April and anybody we referred would net us a giftcard.....the people who are left are not happy about any of this, because all the people who were let go were our friends and they definately deserved better.
Circuit City is in trouble financially. Look how many stores they closed, and that's all the evidence you need. When it comes down to it, the company has to make a decision- close some stores, kill a lot of jobs, or close all stores and kill all jobs. Again, I really don't think these decisions came easy to those involved. There's no reason to demonize a company for things like this when the going gets rough. These jobs are not being tossed aside so the company can increase its margin (THAT would be slimy, and it DOES happen!
Think of it on a smaller scale- what if you owned a computer store, and business was down, but you had three salespeople doing nothing for $15 an hour each? You'd probably try to wait it out and figure out some way to get more business, but at some point, if things are still going poorly, you'd probably lay off a couple of those folks so that you could have the $1,500 (wages plus benefits, plus witholding matching) a week to buy inventory, pay bills, or promote your store.
When these things happen, it's always sad and easy to empathize with the victims of downsizing, but before crucifying the company, consider why the decision was made.
So exactly what does the CEO's earnings have to do with keeping thousands of jobs? Nothing. My guess is that it was stated in the paper to elicit class envy. Again, look at the big picture and start crunching some of these numbers.
This "laying-off" of 3K + employees because they make too much money -- I've never heard of this happening and I haven't read any place in my previous Employment Law classes that a company could lay off people because they have maxed out at their grade.
I'm inclined to agree with socrfan that many goals of some of these companies is simply GREED! And yes Skwerl, these CEO's have the experience and earn their pay -- sometimes too much pay. Why do you need a salary of 33 million a year to guide a company when the consumers who purchase from your stores don't even know what the CEO looks like. The only face we see to many of these large retail stores are the front-line employees -- they could also be identified as first responders. Retail employees are the ones who make people want to return to the store. Retail stores aren't the only culprits -- grocery stores -- some of them treat their employees like so unfairly. I worked for the Giant grocery store chain for about 6 months and then resigned. The unions suck because what union would agree to no benefits for any new employees for 3 years. This tells me they want to hire high school - college students who have little to no financial responsibility and are still on Mom and Dad's insurance. Thank God that for the moment I work for a company that cares about its employees. The only company that I know that pays you a portion of your salary when you are on FMLA.
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