Best Buy Cuts Wages, Jobs In Its Stores

[OhioChick]

Source: AP

April 16, 2009

RICHFIELD, Minn. -- Thousands of Best Buy store employees will see pay cuts and others will lose their jobs as the consumer electronics chain reorganizes.

Best Buy Co. Inc. would not disclose the number of people affected. A spokesman said the move will put more sales people in front of customers. Many store managers and senior-level sales people will go to jobs where they'll interact more directly with shoppers.

New York investment firm Sanford Bernstein said in a research note Wednesday that as many as 1,000 assistant store managers would lose their jobs. Up to another 8,000 senior sales associates would be demoted to jobs paying 25 percent to 50 percent less.

The numbers are estimates by Sanford Bernstein. Best Buy won't confirm or deny them.

Read more: http://www.newsnet5.com/money/19195668/detail.html

[WriteDown]

1. Easy to do...

when there is essentially zero competition. I'll still be shopping at Fry's.

[AndyTiedye]

12. There Were Lots of People in Fry's Last Night

[Raine]

23. I don't really like Fry's

but I'll go there before BB. The last time I was in BB it was like some kind of kid amusement zone, complete pandemonium. x(

[Lady Effingbroke]

30. I like Fry's much better than BB.

Much more stock, much more variety, and I haven't heard of Fry's scamming customers like BB does.

[Iowa]

16. Does anybody even shop at Best Buy anymore?

They have a miserable reputation, overpriced products, bait & switch advertising, and a well-known tendency to rip off their customers in all sorts of ways. There are horror stories posted online regularly. I'm surprised they're still in business. I shop online at places like Newegg for almost all of my electronic needs and they have never disappointed.

[ihavenobias]

2. 25 to 50%?

Which means those employees will have 25-50% less to spend at other (local) businesses, and the destructive cycle continues.

[OhioChick]

3. With a 25 to 50% wage cut....

Will they even be at minimum wage?

[ihavenobias]

4. Good question.

I just assumed they HAD to be.

[brentspeak]

5. Damn union workforce! Always destroying businesses.

Oh, wait...

[cloudbase]

6. That worked so well for

Circuit City.

[Mopar151]

9. Sears, too n/t

[saigon68]

10. Yes Circuit City

R.I.P

(Not)

[high density]

17. My first thought as well

I guess now that Best Buy feels they have a virtual monopoly on consumer electronics in most markets, they can let whatever lackluster service that did exist get even worse. I am most happy in that store when I don't have to interact much with its staff.

[Systematic Chaos]

7. Look at the bright side:

Shoplifting shit right out from under them to sell on the black market will now be even easier than it was before!!

:sarcasm: - or not....

[LeftyMom]

8. Oh geez, a friend of mine is one of their "senior sales associates" and has a new baby.

He barely makes enough to starve on as it is. Thankfully the baby's Mom has a good job.

[Alhena]

11. Deflation versus the Fed printing money like crazy- deflation seems to be winning

[Zenlitened]

18. Ding!

:thumbsup: :thumbsup: :thumbsup:

[starroute]

13. One online site suggests $9 to $13 a hour for senior sales associates

That's a general figure -- not for Best Buy specifically. But it does suggest they'll be knocking them down to something more like $7 an hour -- not all that much above minimum wage.

[riverdeep]

24. I have no idea how people can live on mininimun wage.

I think the federal is $6.55. So $6.55 x 40=$262/week or $262 x 4=$1048/month. Figure they take out $200 in taxes and withholdings, and that's about $850 a month. The cheapest rents around here are around $600/month. That leaves about $250 for groceries, telephone, heat, electricity, water, fuel and miscellaneous. The only way it could work is if you share the rent with a couple other people, and get at least another part time job.

I'm sure if companies could pay less than the minimum, they would.

[Lady Effingbroke]

29. I lived on minimum (which in TX was 5.15.at the time) and not much more for 10 years.

The most I ever made per hour at my various jobs was $8. I did it by living alone in a travel trailer in a trailer park. Lot rent was $200 including utilities, and I paid $30 for a cell phone, $50 for dish tv, and about $200 for food and fuel.

That's the only way I know that a single person in my area can survive alone on minimum wage.

[aquart]

14. Pay cuts for the executives as well?

[radfringe]

15. :ROFL:

:rofl: :rofl: :rofl: :rofl: :rofl:

Executives will be given BONUSES for improvements to bottomline due to cost cutting...

:rofl: :rofl: :rofl: :rofl: :rofl:

[macebowman]

19. Best Buy improves gross margins fourth quarter

Best Buy was able to improve gross margin to 24.6%, compared to 23.7% this time last year

http://www.fool.com/investing/general/2009/03/26/buying-up-best-buy.aspx

You got that Best Buy employees? You bust your tail, you make the company more money on less sales and what do you get, fired or your pay cut.

Seriously, their employees IMPROVED their gross margins. Last I checked, thst kind of what they were suppossed to do. It's Best Buys job to get the customers into the stores, it's the employees job to make money on the customers when they get there. Looks like they doing their part.

So, why does Bestbuy pull this action in the face of improving gross margins? Because they can, that's why. Seven dollars an hour? Better to set up a produce stand, or at least sell apples on the street. I hunt rabbits and live in the woods before I work for seven bucks an hour.

[OhioChick]

21. And look how they repay those who helped them earn that $$$$.

The new American way.

[ohio_88]

28. Gross Margin

“Best Buy was able to improve gross margin to 24.6%, compared to 23.7% this time last year.”

Gross margin is the difference between the selling price of the goods and what Best Buy paid their supplier for the goods. i.e. If they pay $.75 for something and price it $1.00, they have a gross margin of 25%. To maintain this gross margin they must sell the item without reducing the retail price in order to maintain that 25% gross margin. From this $.25 of every dollar’s worth of goods sold they must pay all expenses such as rent, fixtures, store supplies, utilities, payroll, etc. If all these things cost them $.22 for every dollar in sales they will have $.03 in gross profit. After taxes they will be lucky to have $.015 of every dollar as net profit.

Basically an increase in gross margin really means that they have either received a price reduction from their suppliers or raised the price of their merchandise. There’s no net profit until the goods are sold without a reduction in selling price and the cost of doing business has been deducted and the taxes paid.


Ohio_88

[sarcasmo]

32. It's all about Wall Street.

[xchrom]

20. recommend -- man -- it is really awful out there. nt

[lanlady]

22. Worst Buy

worst job, worst economy.

[960]

25. BB is in a death spiral, as it should be. I just feel for the employees.

[riverdeep]

26. And so the race to the bottom continues.

Do you understand Average American? Do you get it yet? YOU ARE A LIABILITY. Remember that job listing that said it wanted 'team players' (they ALWAYS want team players)? Yeah, that was for suckers. You were never part of their team. That was just to get you to do the nasty stuff they wanted you to do. When it comes to their obligations to YOU as a 'team member', suddenly the rules change.

Who are all these companies planning on selling to? The basic philosophy in corporate America is that your labor force is your greatest expense, and so let's do all we can to screw them over. If we can offshore your job, we will. If we can move the physical plant, we will. If we absolutely have to stay here, we'll pit state against state to give us the lowest tax rates and union busting work environment, and then, every chance we get, we'll screw you over. Welcome to America 2.0 peasant, the New Feudal State.

[Blandocyte]

27. From Best Buy to Goodbye

Yikes. As we lose more and more stores and corps, all we're gonna be good for is to be the new toxic waste dump for the next crop of industrialized nations. Most of our jobs will be in the disposal industry.

[workinclasszero]

31. Yeah Best Buy, it worked great for Circuit City

when they fired all the well paid experienced workers and slashed wages to the bone.

Oh wait.....