A while ago I wrote about a stupid move Circuit City made regarding its veteran sales workforce.
The company decided last year to fire 3,400 of their highest-paid clerks and replace them with workers who would take less money.
My story sparked quite a bit of outrage in the blogesphere against the electronics retailer, and almost every analyst called it a dumb business decision that would take a bloody bite out of employee morale and also create a crummy shopping experience for customers.
But Circuit City management stuck to their guns. So what was the outcome?
It turned out to be a bust.
This from the Associated Press today:
Circuit City Stores Inc. is considering closing at least 150 locations and slash thousands of jobs to avoid filing for Chapter 11 bankruptcy protection, a report said Monday.
A report in the Wall Street Journal said people familiar with Circuit City’s plans said the store closings and job cuts could allow the retailer to liquidate $350 million in inventory that could be used to pay real-estate costs, including leases on abandoned sites. Circuit City, the nation’s second-largest consumer electronics retailer, could then try and renegotiate leases with existing landlords, the report said.
Surprise, surprise. Trying to create a third-world workforce in the Good Old USA doesn’t garner a lot of customer or employee loyalty.
Maybe they should hire back those former employees, the ones management thought were grossly overpaid at $8 to $15 an hour.