RIP Philo

Life is good if you are King - Circuit City fires 3,400, will hire lower-paid workers

Circuit City CEO Schoonover received $1.4 million in salary and bonuses in fiscal 2006, plus 340,000 stock option shares and $96,929 in other compensation mostly related to use of a company jet, according to a filing with the Securities and Exchange Commission.

I would like some proof executives make a bit of difference. Stocks go up and down with the business cycle. Yet they get rewarded like they had something to do with it.
Permalink son of parnas 
March 29th, 2007 3:36pm
I'm so totally desentized to this stuff.  He took down enough money to retire me in a single year, but after so many others -- Nardelli at Home Depot, Grasso at the NYSE ... -- I think "oh, just $1.4 million?"
Permalink z-z-zed 
March 29th, 2007 3:40pm
"The fired workers will receive severance packages and a chance to apply for lower-paying positions after a 10-week delay"

Why the 10-week delay?  A legal tactic?  Just lowering the wages of these employees would be illegal?  zed is very suspicious.
Permalink z-z-zed 
March 29th, 2007 3:47pm
“You can hire a bunch of cheap, inexperienced people but that has to show up as diminished service and probably lower sales,”

So no genius bar then...
Permalink z-z-zed 
March 29th, 2007 3:48pm
> So no genius bar then...

It closed because not enough people went.
Permalink son of parnas 
March 29th, 2007 3:49pm
"The fired workers will receive severance packages and a chance to apply for lower-paying positions after a 10-week delay"

Should this sort of tactic be legal? Current law is that since they were fired without cause, they are eligible for unemployment. The token severance package they are getting is just a legal ploy - they have to sign a contract agreeing not to sue the company over the dismissal.

Seems pretty predatory, but perhaps the marketplace will make the final decision. Will people stop shopping there because they don't like the sort of company it is? I would hope that would be the case, but it wasn't the case with WalMart. However, with Circuit City, it's not like they have the lowest prices so a decision to boycott can be made with minimal economic impact to one's self, making its feasibility more likely.
Permalink Practical Economist 
March 29th, 2007 3:50pm
"Circuit City, the nation's No. 2 electronics retailer behind Best Buy, will eliminate an additional 130 jobs by outsourcing some computer work to International Business Machines and will consider options for its Canadian stores."

Hiring consultants from IBM is cheaper than in-house IT? I think not. Can anyone say 'kickbacks'?
Permalink Practical Economist 
March 29th, 2007 3:52pm
Huh, they were only paying their salespeople $10 an hour anyway and this is to pay them less while the CEO pays himself a couple million.

I'm pretty sure Circuit City is the place I buy AV stuff, I'd have to find a receipt to be sure. I've shopped there mainly since I don't like WalMart's policies towards its workers. But now that they are the same, might as well go back to WalMart where stuff is cheaper.
Permalink Practical Economist 
March 29th, 2007 3:55pm
"They're saying, 'We'll get rid of the most knowledgeable people who have been around the longest and hire people who haven't a clue.' It doesn't make sense to me.”

This guy makes a good point. They make their profit when a guy comes in to buy a TV and the salesman convinces him that what he really needs is a plasma display, and surround sound, and monster cables because they are deoxygenated and boy you can really hear the difference can't you? And don't worry that it's ll $8000 because we have a financing plan that makes it only $90 a month, and that's less than cable!

The inexperienced salespeople will say "A TV? Yeah, they are over there." and go back to playing video games or talking to his friend on his cell.
Permalink Practical Economist 
March 29th, 2007 3:59pm
costco is pretty much the golden child in this genre.

low costs, good employee relations/benefits, high profits.
Permalink arg! 
March 29th, 2007 4:00pm
I don't think there's one around here. Is that one of the ones where you have to pay a membership fee?

Actually, now that I am thinking more about it, most the electronics stuff I buy from random mom & pop stores in various states, whatever backwater operation has the lowest price on pricegrabber, it's almost always some camera shop somewhere or such.
Permalink Practical Economist 
March 29th, 2007 4:15pm
omg, I was at Circuit City customer service the other day for over an hour and not only do they not have an office to sit down high-merchandise customers (my friend had bought two plasma TVs and installation) in, it was near the entrance where they blasted annoying music videos. I can see why they wanted people to enter the store and get all pumped up, but after an hour of listening to the same beat over and over again, it was aggravating.
Permalink Send private email strawberry snowflake 
March 29th, 2007 4:23pm
New Circuit City motto:

Recepción para circular la ciudad
Permalink xampl 
March 29th, 2007 4:37pm
>Is that one of the ones where you have to pay a membership fee?
Perhaps you are thinking of Costco.

Circuit City is a retailer that isn't very good, and were the prime proponents of the failed DivX players a few years back. Those were encrypted DVDs which you needed to unlock *per player*, so you'd end up paying for the same movie twice if you wanted to play it in the living room and play it on the player in the bedroom. If you didn't pay for them, you'd only be able to play it for 3 days, and you'd never be able to ever play it again on that player. If your player broke, you'd have to repurchase your movies all over again. If you were a Circuit City employee and told a prospective customer what the downside to divx vs dvd was, you'd be fired.