Firing on All Circuits?

While "cost cutting" is a term anyone in sales, marketing or management hears—and dreads—every day, I really have to commend Circuit City. They saw a problem—dropping sales figures—and did something about it.

They laid off 3,400 hourly workers, who, according to Circuit City, make too much money. Instead, they’ll be hiring entry-level employees who will work for $8 instead of $10 or $11.

You really have to applaud this sort of mindset. Your average company might have looked at the CEO’s salary, for example. In this case, Chief Executive Officer Philip Schoonover received $8.52 million in fiscal 2006, according to Bloomberg, including a salary of $975,000. Some short-sighted companies might have seen this as a quick fix to fiscal woes. But not Circuit City.

Some woefully inadequate companies might have looked at dreary numbers and had visions of conducting sales training to fix those pesky quarterly figures. But not Circuit City.

Other corporate jungle prey would have seen this as an opportunity to try a different marketing campaign, examine its customer service practices or its pricing strategies. But not Circuit City.

But those same companies won’t have the exciting challenge that Circuit City has now: an inexperienced staff, abysmal morale and word-of-mouth that will make previous sales losses look minor.

So, who’s laughing now? Not Circuit City.

Comments

[Ron Hayes]

So, what is missing in the minds of corporate America? No matter how many times this kind of thing happens and gets lambasted by the business world, it continues to happen - and in large corporations that should know better. When will the idiocy end? Jacqueline, nice use of sarcasm in discussing this subject.

[John Windsor]

Nice riff, Jacqueline! I guess they'll get what they deserve. Their stock price sure hasn't rewarded this *brilliant* move...