Best Buy To Lay Off HQ Workers: Report
BY Alan Wolf -- TWICE, 1/27/2009
MINNEAPOLIS — Best Buy will lay off employees at its corporate headquarters next month following a tepid response to an earlier buyout offer.
According to a report by the Minneapolis Star Tribune, an unknown number of workers will be downsized on Feb. 19. The employees will receive six months’ pay and benefits on average, as opposed to the 7.5 months of pay and one year of benefits provided to the 500 workers who accepted the
. Those staffers, who represent about 13 percent of Best Buy’s 4,000 corporate-level employees, are scheduled to leave on Feb. 12, the newspaper said.
A company spokesperson told the Star Tribune that new jobs will likely be created as part of the “overall process of realigning resources,” and that some employees might be eligible for different jobs at headquarters.
Workers were informed of the layoffs today by email and in meetings, the newspaper said.
Vice chairman Brad Anderson signaled the possibility of layoffs in December and announced plans to cut capital spending in half amid what he described as “the most challenging consumer environment our company has ever faced.” The moves came in the wake of a 77 percent drop in fiscal third-quarter net earnings to $52 million and a 5.3 percent decline in same-store sales worldwide.
Word of Best Buy's layoffs coincided with Target's termination of 9 percent of its headquarters workforce to cut costs and boost earnings amid the weak sales environment. The mass merchant also plans to close a distribution center in Arkansas later this year.
Target's layoffs affected about 600 corporate-level employees and eliminated 400 open positions, while the closure of the company’s Little Rock distribution center will result in the loss of 500 jobs.
“We are clearly operating in an unprecedented economic environment that requires us to make some extremely difficult decisions to ensure Target remains competitive over the long-term,” president/CEO Gregg Steinhafel said in a statement.
In addition to workforce reductions, the company has also suspended salary increases for senior management, reduced new store openings, tightened its credit card policies, and is cutting corporate operating expenses including outside contractor support and travel and entertainment.
Target said it took the actions to bolster earnings squeezed by months of weaker-than-expected sales, and in anticipation of “continued difficult economic conditions well into 2009.”
Target’s affected headquarters employees will continue to receive full pay and benefits through April 1, after which they will receive a comprehensive separation package based on their years of service that includes 12 months of continued health care, Target said. Little Rock employees will be offered positions at other distribution centers or will receive comparable severance.
As a result of the restructuring, Target expects to record a charge of approximately 3 cents per diluted share, mostly in its fiscal 2008 fourth quarter, but expects that the resulting annualized benefit will exceed the charge.
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Sarah, I agree with you 100%. We could all see the ship was sinking well before it did. Yet we stayed on, hoping against all hope that someone would rescue the company. I was with Tweeter for many years and thought things were especially bad from 2006 to 2007. But those times were very rosy compared to the time after Schultze bought the company. From that point on, nothing good was happening. Many words come to mind when I think of what he did to Tweeter in the last year. Lack of integrity, greed, criminal, and evil. Those describe Schultze to a tee. In hindsight, I truly believe there was NEVER a plan to save the company. Only a plan to rape it, which was done quite well. But, like you said, we all must learn from this, pick ourselves up and start over. We have no other choice.
Terminator - 2009-30-1 10:13:00 EST -
Agree that the multitude of Tweeter postings the past few months has more to do with upper management differences than anything else. CC is setting up job fairs and helping people via LinkedIn before their ship sinks completely under the waves. Tweeter''s glorious leadership teetered between being invisible and downright criminal....and evil the last few months. And I''m talking about the 3-4 months leading up to the Chapter 7 stuff too. Some of the decisions forced down the throats of the support departments those last few months were made by insane and small minded nitwits. If I lived in the past I''d kick myself in the rear every morning for staying until the end, but the better thing to do is to live, learn, and move forward....and wherever all of us end up next we make sure to keep a sharp eye out for similar thinking clones appearing at our next place of employment.
Sarah Connor - 2009-30-1 07:36:00 EST -
Maybe it says more about management's treatment of EE's
retail - 2009-29-1 10:57:00 EST -
It's interesting to me that an article on Best Buy or Circuit City receives virtually no feedback. Put up a Tweeter article however and the response dwarfs all others. Who else has noticed this? Tweeter is gone but it does say a lot about the caliber of people who worked there. The store level people I mean.
motion - 2009-28-1 14:40:00 EST -
Maybe Target should cancel their naming rights to the Twins new baseball park and stop sponsoring the race cars so people can keep their jobs and feed their families. Nice.
Lew - 2009-28-1 11:35:00 EST
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