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Circuit City tries to get back overpaid workers fired in March

21 November 2007 15:16 by Rich "vurbal" Fiscus | 10 comments

Electronics superstore chain Circuit City is hoping to convince some of the workers they fired earlier this year because they were "overpaid" to return to work at locations around the country. Letters were sent to many of these former employees to fill positions opened by normal employee turnover and new store openings.

In March of this year Circuit City made the move to get rid of 3,400 employees. They determined that these employees were paid too well for their positions and could be replaced with lower paid personnel. The workers were given no advance notice of the decision, although they did receive a severance package. At that time analysts were sceptical of the move's merit. "It's definitely going to have some cost-savings, but I think the bigger impact could be seen in weaker, poor service," said Timothy Allen, an analyst with Jefferies & Co. "I have a feeling the people they're letting go have probably been there longer, have more experience, more product knowledge."

As the number two U.S. electronics retailer, Circuit City has struggled to keep costs down to remain competitive and profitable at the same time. The firings were intended to cut costs within the company by $100 million this year, and $140 million annually starting next year. So far company executives haven't commented on the letters, which were first reported by the Wall Street Journal.

Sources:
Reuters
Washington Post

Permalink to this article

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Discuss this article!
mm2000y (Junior Member) 23 November 2007 15:55
You get what you pay for, or in this case what you don't pay for. [ + quote]
johnny121 (Newbie) 23 November 2007 16:03
Fire good people during slower periods. Replace them with underpaid and unmotivated drones. Rely on the slow economy to keep [those fired] in desperation. When the buying season begins, hire them away from whatever employment they've managed to find- and pay them less than they were previously making. Wal-Mart corporate would be proud. [ + quote]
ZippyDSM (AfterDawn Addict) 23 November 2007 16:10
*Originally posted by johnny121:* Fire good people during slower periods. Replace them with underpaid and unmotivated drones. Rely on the slow economy to keep [those fired] in desperation. When the buying season begins, hire them away from whatever employment they've managed to find- and pay them less than they were previously making. Wal-Mart corporate would be proud. frankly I wouldn't go back for less ,make it 10% than waht you were getting at the time and you have a deal :P [ + quote]
Fiji5555 (Junior Member) 23 November 2007 16:58
Idiots like Circuit City deserve to go out of business if they don't have respect for their workers. You hear this Corporate America? We aren't taking your BS anymore. [ + quote]
justme81 (Newbie) 23 November 2007 18:01
Get it CC fire good employees and get crap ones and look what you get crap work. The employees you fired were making the $$ they were for a reason Dumb ass CC corp. [ + quote]
ali2007 (Inactive) 24 November 2007 6:38
Well first they say work good and we will give you raise, and then they say you are getting paid for nothing and fire you. i think employees should sue them. [ + quote]
jacsac (Member) 24 November 2007 22:29
Whose grand idea was this? 1. Fire all the people that worked hard to get somewhere in our company. 2. Hire low paid untrained people to sell complicated high-end electronics. 3. Contact previous fired employees and try to hire them for low wages all while thinking that they are dumb enough not to hold a grudge and try to screw CC. If I had that happen to me, I would be selling everything I could right out their backdoor. Circuit City, your service already sucked and now this? You won't see me there again. [ + quote]
vurbal (Staff Member) 26 November 2007 1:44
I first heard about the firings from a poster on another forum I frequent. I think his post said it all. *Originally posted by One of the overpaid employees:* Seems that Circuit City won't make numbers this quarter, and decided to practice "wage management". Pretty much anyone making more than what they want to pay for our labor was laid off. So, after 9 years, I'm now looking for employment again. No offer of taking a wage cut (which, ironically, I was willing to do), though I can reapply in 10 weeks, if the part-timers that they replace me with don't work out. It's all about the funny money; stock prices had fallen about $10 a share from a high of around $30 a year ago, resulting in what CEO Phillip Schoonover said was a $2.4 billion loss of investor value. Stock prices have risen an average of $0.40 on the news, apparently recouping about a tenth of that figure. I've come to kick ass and chew bubble gum.... and I'm all out of bubble gum What is best in life? To crush your enemies, see them driven before you, and to hear the lamentations of their women. [ + quote] This message has been edited since posting. Last time this message was edited on 26 November 2007 1:45
emugamer (Junior Member) 26 November 2007 12:16
I hate Circuit City. I've rarely stepped foot in one in the past 2 years. It helps when there is a Best Buy across the street. Their service sucked when I was still going there. The rare times that I have stopped in, the place was like a prop in a deserted western, tumbleweed and all. Their environment is definitely a reflection of their corporate policies. I hadn't heard or read about those layoffs until this article. Now, I probably won't even go in there to price-match. [ + quote]
borhan9 (AfterDawn Addict) 19 December 2007 19:18
*Originally posted by mm2000y:* You get what you pay for, or in this case what you don't pay for. Tend to agree there. This is crazy how you can fire them blame them for everything and then ask them to come back when they realize business is worse off without them than before. :P [ + quote]