Circuit City Short Circuits Its Brand By Slashing Staff

I’ll admit I’ve never been a fan of Circuit City, but this story is just a whole new level of sick:

Circuit City Stores is firing about 3,400 workers at its stores who are paid “well above the market-based salary range for their role” and will hire new associates for these positions who will earn less, the consumer electronics retailer said Wednesday.
In a news release, the Richmond, Va.-based company said the layoffs were made to improve its cost and expense structure.
Circuit City did not provide details on how much the affected workers are compensated or how much the new hires would earn at what the company calls the “current market range.”

Mark my words: Circuit City will go out of business in the near future. When you run a retail store, the in-store experience is everything. It doesn’t matter how good or bad you think their service is right now: by deciding to get rid of thousands of employees to replace them with cheaper, less experienced staff, customers will get lousy service. And be less inclined to ever return. Since they don’t offer the lowest prices ala Wal-Mart, there’s simply no reason to shop there.
No amount of advertising or marketing can save them after a pathetic business decision like this. Saving money in the short run isn’t going to help. The retraining costs and the inevitable turnover you get with the new bottom-of-the-barrel workers will hasten the decline.
They’re killing their brand. It’s that simple.

About Dan Goldgeier

Blogging on AdPulp since 2005, Dan Goldgeier is a Seattle-based freelance copywriter with experience at advertising agencies across the U.S. He is a graduate of the Creative Circus ad school, and currently teaches at Seattle's School of Visual Concepts. In addition, he is a regular columnist for TalentZoo.com. Dan published the best of his TalentZoo.com columns in a book entitled View From The Cheap Seats: A Broader Look at Advertising, Marketing, Branding, Global Politics, Office Politics, Sexual Politics, and Getting Drunk During a Job Interview. Look for it on Amazon in paperback and e-book editions.

  • skyview satellite

    Agreed. Further, it also demonstrates that the executive officers are content to have an openly adversarial relationship with their own employees. In some industries you may well thrive by deliverately treating people badly, but I don’t think retail is one of them.

  • mark

    Yea, you can maybe get some help at $6-7hr. Maybe teenagers, but they won’t show up on time every day or even most days. They aren’t going to care whether the customers buy anything or not and will probable act as lookout while their friends steal the store blind. Turnovers going to be sky high.

  • Ornery

    Look out retail giant employees like Walmart, kmart, Lowes ect. You will be next. I will not set foot in a Circuit City.

  • Erik Leanos

    I worked for circuit city back in the commision days and when they laid a bunch of ppl off i was one of them, i was rehired and i was getting paid $15.00 hr i was ranked 2nd in the district in services and volume wise averiging over 10% a day in servicses and i got hit again with a slap for doing good. I encourage PPl not to apply for a job at circuit city cause there is no growth in that company, just imagine when you evaluation comes up and you are due for a raise should we be Happy or should we be scared, I belive circuit city is going to shut down its entire stores, and i hope it happens. they do not desrve for customers to buy at circuit city for the reason been that they care about themselfs and not about 3,400 emplyees. This Store has created major issues for familys that they just bought a house,or maybe they are having a baby, this ppl broke hearts and familys,its depreesing that you are loyal to a store and then you get a slap, DONT SHOP AT CIRCUIT DONT SHOP AT CIRCUIT CITY>>>SPREAD the Word

  • http://www.associatedcontent.com/article/196627/how_circuit_city_rewards_its_employees.html Sarah

    My mother worked for this company for 22+ years. She was picked because she is one of the oldtimers that still had a pension, benefits and nice vacation time. She sure didn’t make good money but it was enough to be happy and in a couple years she would retire with one of the last benefits available to her the “discount for life” reward. She is now 57 and unemployed for the first time in 2 decades.

  • Pat

    This is a copy of what I sent to Circuit City yesterday after I had read the “layoff” announcement. They can call it whatever they want, but I believe extortion would be more appropriate than layoff.I am hoping to get a response from them, but I won’t hold my breath.
    03/29/07
    After reading an article this morning about Circuit City laying off 3400 employees and offering to hire them back at a lower wage, I was seeing red. Circuit City’s remark that the workers being laid off were earning “well above the market-based salary range for their role”
    What a slap in the face for those affected. If you were really serious about controlling wage growth, your first step should have been to terminate those responsible for checks and balances in the wage structuring system. Someone was asleep at the wheel. Certainly if there is a disparity in those workers present wages, the problem needs to be addressed. But this is without a doubt the wrong way to achieve this goal.
    This is an example of corporate greed that will go into the record books. What’s next, threaten other “associates” to accept a lower wage or face termination. My wife and I had picked out a home theatre system at your Rockford, IL retail store, and were planning on purchasing it when we received our tax returns. Not anymore, unless Circuit City reverses this wrong headed decision.
    I hope any savings that were expected to be achieved are dwarfed by the losses stemming from angry customers, unemployment, lawsuits, and the lower calibre employee’s the “new wages” will attract. This is truly a sad era where corporate America has no loyalty to their employee’s, and any form of compassion or concern for employee’s is rejected in favor of greedy investors and corporate management bonus incentives.
    Because it is obvious the lay offs were implemented as a cost saving measure, I will offer a suggestion on how you can save a little more money. Presently WalMart has Vaseline on sale. The amount of Vaseline you will need before all is said and done will probably exceed the “market-based” expectations of your corporate anal-ysts.

  • david carr

    eric,
    my name is david carr and i work for the new york times and am writing a story for monday about circuit city and want to talk to people who worked there. please ping ‘carr@nytimes.com’ if you have any interest. and sorry for interrupting the conversation with a reporting request.

  • Tori

    You waste your time writing in to the Corporate Office. People very low on the totem pole get your letters, not the CEO. The CEO did not act alone, BTW. It took a lot of people to make the decision. I’ve been laid off. I agree that it’s terrible. But God did not create us to be hateful to others and to wish the remaining 40,000 employees to be out of a job, to rot in hell, and other expletives. It’s worse to lower yourself and act like an ass than it is to make a business decision. You want to blame someone? Blame our wonderful president, who has sunk all of us into economic chaos.

  • Carol

    Customer service at Circuit City stinks. I emailed me them regarding a laptop for sale advertised online. Of course the laptop was sold out in all states between PA (my state) and Missouri. The only store that does have it, somewhere near Missouri is not allowed to ship laptops. Go figure. Seems alot like bait and switch to me, so I contacted their lousy customer service department only to be ping-ponged for 3 days. At this point, I am contacting the corporate office. I want them to make good on their advertisement or to subsitute a similar item for the sale price. I am not hopeful but it may be worth the try. How can I contact their coporate office directly?

  • Alison

    YOU GUYS ARE CRAZY! Circuit City is a company that has recently made a couple of SMART business decisions. Employees were being paid WAY too much for roles and services. Those wages are to blame on mgrs that didn’t think about advancing their associates higher up the work scale, and instead just gave them raises every review time. Not to mention those managers are gone now too…The people who run our stores now, know how to run a business efficiantly, with money decisions and staffing. YOU’VE got to understand that the majority of the lay offs were 30 something adults getting paid hefty amounts to sort cds.
    One might ask ‘how do we get this worker whom is not showing any work ethics?” HAVE A ROUND OF LAYOFFS! IT is sometimes hard to fire an associate if they are ‘just cutting it’ but definantly NOT performing. This round of lay offs was a VERY SMART BUSINESS DECISION> what it did for associatees that have a passion (ala ME) for their job and LOVE circuit city. I have done nothing but advance in my career with circuit city and have not been scared of loosing my job once! I of course work hard though and jump at the oppourtunity to advance in positions. Of course recieving a raise every time..but my role and duties change also. I am VERY happy to be a part of the Circuit City Family and will ALWAYS shop there…thats right shop, not work—I will someday finish my education and move on, but still COME ON! if you were running a huge company and had decisions like this come to your attention, what would you do…..not save over 3 million a year? easy decision guys…I think you just like to complain and hold on to the set backs in life and not move forward.
    I am WOO, SELF-ASSURANCE, ACHIEVER, ARRANGER, and RELATOR.
    p.s. DON’T KNOCK THE COMPANY IF YOU DON’T KNOW THE FULL STORY.

  • jaina

    Sounds like anyone from Circuit City who agrees with any lay-off had to benefit from this. I too had my 5 strenghts , managment training,knew the dm’s, hr mgrs as well as rvp but you also had to be paid nearly next to nothing to not get laid-off. Any one who took the new supervisor posistion were forced if they opted not to take, they were fired. Sounds like a great place to be at. I was layed off but found a job in a higher position and will never look back. Circuit City will never be Best Buy but they can always shot for the stars. As you can tell since the Best Buy managers have came over pmi and gm has been slim to none that is why we were sacraficed.Good luck to all that were left behind. This is only a taste of what is yet to come.
    I am ACTIVATOR,RELATOR,ACHIEVER,STRATEGIC,and LEARNER.

  • CSA

    I too work for Circuit City and have proudly served for quite some time. However difficult this change has been, I believe that it has a chance to work. Within a week, the environment has improved withing our store and I haven’t dealt with happier customers. Being a CSA, CUSTOMER SERIVE ASSOCIATE, I am proud of the work I do each and every day to take care of every customer I help, and make sure that they leave with nothing BUT a smile on their face. This was a smart business decision, and the changes in store are completely positive. You can say whatever you want and speak your mind, but the media only tells you the negative, so why don’t you get the whole story before you tell everyone to STOP SHOPPING AT CIRCUIT CITY!!!

  • Quarterman

    Circuit City is heading in the wrong direction. I’m still there. I’m an assistant manager in a Northeast region store.
    Of my 42 (although roll call still lists it at 70, there are names on it on medical leave or military leave that are expected to not be invited back.) employees, 36 are miserable. I know this equates to poor customer service and lower sales, but I think this is the direction the company wants.
    Now I’ve got 4 (although my roll call says 7) “junior management” supervisor positions, that are held by the most skilled, undervalued people to ever work for the company. I am not allowed to tell them there will be no pay raises. I am to expect them to do their jobs as normal for half of the work week, while the other half, they are expected to do mine.
    For the most part the 36 unhappy people are good, hard working people. They don’t deserve the hatred that the media gives them. Most are skilled workers and salespeople who never got to see the SUPERHUMAN raises that were given to employees that have been let go.
    Its true… They fired 4,160 people. For all I know I could be next. But what they didn’t say is of the 540 managers that got fired, 77% made MORE than $55,000 a year. Guess what? of those 3,400 store employees… most only made slightly less.
    Me? I make about $38,000 a year. Its not fantastic. I’m going to school to build cars and repair high end cars. I’ll make that big money later. My concern is this company wants to hire kids with no direcetion just to make a quick buck.
    Better make em’ quick CC, because the ship is sinking.

  • Ex-fire*** agent

    People,People
    How for the love of me can you agree with such a stupid decision. I used to work for CC and no I am not disgruntled as i quit before these lay-offs took place. I know people personally that got laid off because they were granted raises that pushed them over. You have any idea of how much CC fired people for???. If you were 1cent above salary cap you were gone. I have seen managers and associates that constently made or exceeded budget get laid off. I have seen people working there for God knows how long get fired and replaced with cheap knock offs. Yes, it does show when you enter in an CC store now. Whats worse they re-offer you the same job making like 7HR. yes I know because i thought about going back while I finish school how are you going to have an A+,MCP,MCSA certified tech go from making 14HR to 7HR and get mad when you say no thanks. They are hateful snakes that put me out of their store because i refuse to work for them at such a low rate. CC will never survive this. Current employees thats agreeing with this are either blind,stupid or just riding the bus until they get kicked off. Please people develop a brain and think for once. The experienced associates that loved CC and the customers that loved those associates both hate CC now. Loyal customers are what make a sucessful business. The customers are no longer loyal because they sales associate that became an friend over the years are now suffering major financial lose and struggling to make ends meat. Answer me this world How would you feel if you went from a nice house,car and retirement to starting over in the blink of an eye would you still agree with CC decisions are will you wake up stop being so ignorant and agree with every other sane person that says CC needs to just die liquidate and go away?

  • joe p

    CC or BB they both suck to shop at. People serving you don’t know what they are talking about. Supervisors don’t care enough about you. And as a former employee, all they were concerned about were trying to scam customers for all their money on products that they really did not need.

  • current cc supervisor

    i currently work at cc as a supervisor and let me tell you, this place is going down hill. our store director is the dumbest person to be put in charge of a store like this and i as well as 99% of the other employees here hate it!

  • Eric

    Im a current CC employee at a recently opened store, and i have to say ive worked retail for a while now and this paticular CC seems to be doing okay, but then again, the store is new and there isnt much else in the area, so i guess we’ll just have to see…..
    -E.Ripley
    Q.C. Arizona

  • Erik Leanos

    well it has been 3 years since I was slaped in the face from Circuit City, I haved moved on and I can say now that, what I said 3yrs ago about Circuit City going down the drain and they were going to close down, well they sure did close its doors for ever, I was so pleased when I heard they were filing for bank rupt, I was so happy after that everything went down the hill, like I predicted, I have always said every dog has its day…Hahahahahaha