Wall Street analyst: Best Buy cuts wages, jobs in its stores
A Wall Street analyst says thousands of Best Buy employees may face job losses, demotions or pay cuts.
Bernstein research analyst Colin McGranahan says the consumer electronics retailer is poised to carry out a reorganization that could cut 1,000 salaried assistant store managers. They could apply for other jobs within Best Buy.
In addition, McGranahan says the reorganization could mean pay cuts for 8,000 senior sales people as they are essentially demoted to regular sales associates.
Supervisors who are cut will have 30 days to reapply to both supervisory and non-supervisory roles, while senior sales associates who will be come regular sales associates will receive ther pay differential in quarterly payment for three quarters before they transition to a lower hourly rate, he said.
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Overall, McGranahan says Best Buy doesn't expect the actions would reduce its employee headcount very much. But the actions would significantly slash the retailer's payroll expenses.
Best Buy spokeswoman Sue Busch says the moves are more about getting more employees in front of customers than staff reductions.
The weak retail environment has already lead to the demise of Best Buy's former rival Circuit City Stores Inc., which closed down all of its stores in March.
Best Buy has fared better, but in February said it would cut jobs at its corporate headquarters after it offered a voluntary severance package to most of its 4,000 employees. About 500 workers accepted the offer.
At that time, the company said it was "retooling" its store operating model to deliver a "more intuitive, customer-focused shopping experience."
"We remain focused on growing our business and enabling local growth through customers and employees," said spokeswoman Sue Busch Nehring at the time of the layoffs in February.
"The store changes are less about staff impacts and more about shifting labor dollars to where the customers are."
(The Associated Press contributed to this report)
