Wednesday, March 28, 2007

It's better on top at Circuit City

The race to the bottom continues:
A new plan for layoffs at Circuit City is openly targeting better-paid workers, risking a public backlash by implying that its wages are as subject to discounts as its flat-screen TVs.

The electronics retailer, facing larger competitors and falling sales, said Wednesday that it would lay off about 3,400 store workers - immediately - and replace them with lower-paid new hires as soon as possible.

The laid-off workers, about 8 percent of the company's total work force, would get a severance package and a chance to reapply for their former jobs, at lower pay, after a 10-week delay, the company said.
The company is calling the layoffs their "wage management initiative," which is the polite way of saying they just gave 3,400 employees the shaft.
"I don't think it's fair," said Hamilton Smith, an 88-year-old retired federal worker who had just purchased some batteries at Circuit City. "You need to give people a living, working wage." He said he would think twice before shopping at the company's stores again.
Circuit City was hardly paying living wages. The retailer pays about $10 to $11 an hour on average, and entry level pay is closer to $8 for inexperienced workers.

Of course, Chief Executive Officer Philip
Schoonover does a little better. He made $8.52 million in fiscal 2006, including a salary of $975,000.

3 comments:

CEW said...

Is there a "bottom?" It seems an endless free fall. It is everywhere, down to the cotton balls from China at the Marriott.

http://ourmichigan.blogspot.com/2007/03/made-in-china-small-business-idea.html

abi said...

The more this kind of thing happens, the more acceptable it becomes.

Today's Boston Globe has a story about Fidelity Investments dumping its traditional pension plan for its 32,000 workers.

http://www.boston.com/business/articles/2007/03/29/fidelity_to_end_employee_pension_plan/

But the Circuit City story really set me off. I was going to post on it, but now all I have to do is link to you. ;-)

Kathy said...

CEW, you're right, it does seem like an endless free fall. I'm glad I'm nearing the end of my working life and don't have to pick a career. It's becoming a real challenge to pick something that might guarantee you a decent income with a little bit of security.

Abi, thanks for the link. That story really set me off too. I'll never shop at Circuit City again. I prefer to spend my money at a company that treats their employees with some respect and decency. One newspaper account I read said a 17-year employee was handed a sealed envelope that said "To Whom It May Concern" and inside was his termination notice. That's lower than low.