Minneapolis – Best Buy has pink-slipped 400 workers at its corporate headquarters.
The layoffs and other cost-saving measures, all executed today, will trim about $150 million in expenses, the company said.
Most of the savings will come from non-salary expenses and were achieved by removing management layers, eliminating operational inefficiencies and focusing on its core businesses, Best Buy noted. The cuts do not include any store closures or Blue Shirt sales associates, although the company disclosed plans last month to close 15 Canadian stores and lay off 5 percent of its workforce north of the border.
The moves represents the first phase in CEO Hubert Joly’s plan to slash $725 million in overhead over the next few years while boosting sales and profits under his “Renew Blue” initiative. Additional reductions will be made during the year, the company said.
The chain will provide greater detail on its cost reduction plans on Thursday, when it will reports its fourth-quarter and full-year results.
Thursday is also the deadline for founder Dick Schulze to submit a buyout proposal to the retailer’s board. The former chairman announced his intention to acquire the company in August for approximately $8 billion, but has reportedly been unable to line up the financing.
Complicating a takeover bid is Best Buy’s rising share price, which has benefited in recent weeks from a positive holiday sales report, a permanent price-matching policy to help counter showrooming, and analysts’ endorsement of Joly’s turnaround efforts.