Circuit City Screws Its Employees and Gets Its Just Rewards
Okay, so this is at this point some well-aged news, but I just heard about it, so I have to assume you haven’t either.
Get this: Circuit City is paying its senior salespeople $14-$15 an hour. In an attempt to curb their losses and make the company profitable again, they go ahead and fire all those senior salespeople and replace them with new hires at $9-$10 an hour. Perhaps unsurprisingly, Q3 losses balloon from $20 million in 2006 to a cool $200 million in 2007. Yeah, baby! Flash forward to their share price dropping 75%! Awesome!
Obviously, this is exactly the sort of thing that kills companies, but of course they’re not done yet. In order to retain the executive team (you know, because they’re so frickin good at their jobs), they’re offering retention awards of $600,000 for vice presidents and $1,000,000 for senior executives to stick around until 2011. Yeah, baby. That is fucking hawt.
My question is what makes them think they’ll be around that long? I can tell you right now I wouldn’t be letting them expand their credit line if I were a lender. Can you say ‘early corporate victim of the recession’? Yes, very good!
Incidentally, Best Buy’s profits rose 52% in that same period. Coincidence? I think not.
I’d like to say this will teach companies not to screw their base-line employees, but that’s obviously wishful thinking.
Here’s the original Washington Post article, and here’s some nice analysis at the American Prospect.
