Circuit City plans layoffs, hiring of less-expensive store workers [View All]

Source: Associated Press

RICHMOND, Va. — Circuit City Stores (CC) said Wednesday that it plans to cut costs by laying off 3,400 store associates and hiring lower-paid workers to replace them and by trimming about 130 corporate jobs.
Circuit City, the nation's No. 2 consumer electronics retailer behind Best Buy (BBY), will lay off store workers it said were earning "well above the market-based salary range for their role" and replace them with employees who will be paid at the current market range, the company said in a news release.

"We are taking a number of aggressive actions to improve our cost and expense structure, which will better position us for improved and sustainable returns in today's marketplace," said Philip J. Schoonover, Circuit City's chief executive.

The company also plans to outsource its information-technology infrastructure operations to IBM, a move that is expected to cut IT expenses by more than 16%. About 50 of Circuit City's IT workers will move to jobs with IBM and remain on the Circuit City contract. The other 80 corporate positions will be cut.



Read more: http://www.usatoday.com/money/industries/retail/2007-03-28-circuit-city-layoffs_N.htm