Circuit City Restructures Workforce
By Alan Wolf -- TWICE, 5/31/2007
Richmond, Va. – Circuit City has dismissed 200 employees at company headquarters here today and has begun realigning store workers around the country as part of an ongoing corporate restructuring.
The headquarters layoffs affected departments across the board, and were implemented to control costs and eliminate duplication, spokesperson Jackie Foreman told TWICE. For the past several months Circuit City has been reorganizing its corporate workforce into cross-functional teams to promote teamwork and to allow the company to react more quickly to marketplace changes, she said. Headquarters staff now numbers about 2,900.
On the store front, the No. 2 CE chain is re-deploying managers and sales clerks as it prepares to implement new store operating procedures in June. The new policies were designed to improve store operations and the customer’s shopping experience, Foreman said. The procedures will differ by location, and include such changes as restocking shelves after, rather than during, store hours.
Personnel shifts include the transfer or dismissal of managers at lower volume stores, effectively reducing the headcount from five managers per store to between three and five per location depending on sales volume. The company is also eliminating the position of product specialist. To fill the breach, Circuit City is creating a new, better paying supervisory role for front line sales associates that, “puts more operating authority into their hands,” Foreman said.
All told, 654 store level staffers are being cut, although there will be "no significant change in the level of personnel in stores," she said.
Foreman added that the new procedures were tested in dozens of stores and resulted in improved associate morale and a better in-store experience.
Despite the layoffs, Circuit City expects to end the year with more hires than fires as it continues to add staff in such growth areas as its firedog IT and home installation service. The restructuring, Foreman said, will put the company on better footing to achieve long-term growth and success.
Goldman Sachs analyst Matthew Fassler observed in a research note that the HQ layoffs could save Circuit City an additional $15 million to $20 million annually, although the savings from in-store staffing shifts were already accounted for in the company’s previously announced $110 million cost cutting. “While we view this additional savings as a potential positive,” he wrote, “we are maintaining current estimates as it sounds like business trends are still under pressure.”
The moves represent the latest round in an ongoing corporate restructuring that included store closings, a management reorganization, and the dismissal in March of 3,400 of CircuitCity’s highest paid and most experienced sales clerks.
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Circuit has been doing this for years!! They eliminated all their commissioned sales people and went to an hourly workforce. They were not as knowledgeable and sales went down. They used to stand for their service and knowledge. Now they are just trying to survive and keep making the same mistakes. Walmart has better customer service than Circuit City. Have you been in one of their stores lately? The employees are listless and unmotivated. When you can find one. Time to sellllllll.
Gary Nickell - 2007-5-6 17:02:00 EDT -
What are they thinking at Circuit City? How can they get rid of their top salespeople and then give pay increses to inexperienced unproven salespeople? In my management and sales experiences, one top salesperson is equivalent to five ordinary salespeople. What is this you going to do to company morale? How do they expect to maintain, let alone grow sales?. Circuit City must have exclusivity on a ground breaking revolutionary product that doesn''''''''t need a well trained, professional salesperson to sell it!
Antoine Brooks - 2007-4-6 08:49:00 EDT -
i worked for circuit city for 2 and a half years and not once were there these mass lay offs or talk it wasnt till phil took the company over that this all happend some of the hardest working people in my store are now without a job i went in there the other day and did not get greeted once because no one is there working and then to get rid on the senior product specialist position is bs my friend john is on his honeymoon and when he gets back he will find out he doesnt have a job anymore that is messed up i say everyone boycotts circuit city
Adam - 2007-1-6 18:21:00 EDT -
This was an opportunity to get rid of anyone they felt was making too much money. This is typical of what Schoonover thinks should be done. He has done this before in other companies. The result is poorer customer services, less knowledgable employees and it will result in a reduction of sales and growth. In 2 years, circuit city will be gone.
Kaye Lastima - 2007-1-6 07:35:00 EDT -
just another example by Phil Screw-over to keep the little man down, while he lines his pockets........
Topsy - 2007-1-6 07:20:00 EDT
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