Now that Circuit City is immediately laying off approximately 3,400 of its highest paid [in store, non-upper management] workers (
“Circuit City Stores, Inc. Announces Additional Changes to Improve Financial Performance.” Circuit City Stores Newroom) you have to think about how that’ll affect their customer service. Oh wait, they never had good customer service in the first place. 3,400 employees being laid off for cheaper labor, sounds a lot like in-country outsourcing. Wouldn’t it be better if Philip J. Schoonover, the Chairman, President, and CEO of the company, have his salary reduced from $1.42 million (
company profile, courtesy of Yahoo) a year to something more in line with the perceived financial performance of the company? What about the consultant they’re paying $2 million a year for? I wonder what he does? For a company that made $2.8 billion last year in gross profit, something is definitely wrong with this picture!
Did I mention they’re also outsourcing their information technology infrastructure operations division to IBM for a savings of 16% over the life of the contract? 80 corporate IT staff will be terminated immediately with 50 being transitioned to IBM in support of the outsourcing contract.
Current math: 3,400 employees, $15 (average) per hour, 2080 hours per year = $106.8 million
Updated math: 3,400 new employees, $9 (average) per hour, 2080 hours per year = $63.6 million
Better customer service leads to better sales. Better sales leads to increased profits. Apparently Circuit City wants their customers to shop the Internet and
Best Buy. I, personally, find only one reason to step inside of Circuit City and that is for new DVDs which are always on sale.