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.
