Circuit City's time clock experiment

A couple of weeks ago I wrote an entry highlighting an article about Best Buy experimenting with a flexible schedule with some of its employees. This week rival Circuit City launched its own experiment by not scheduling its 3,400 highest paid retail employees. As in firing them. You can read more sordid details here.


This move strikes me as, what's the word I'm looking for? Oh yeah... stupid. If people are making well over the "range", that means that they are most likely highly experienced. Assuming the average savings is $5 an hour per employee and all of those employees were full-time, we are taling about a savings of $3.5 million. Assuming that you don't lose sales because your most tenured people have been replaced by people willing to work at Wal-Mart wages. And don't make any costly mistakes. Oh, and are free to to train.

I wonder how hard it would have been to shave that $3.5 million from say the top 10 executives ay Circuit? What kind of bonuses did they get? No wonder it's going in the toilet.

I would say that this is fallout from the TV Wars Bloodbath created by Wal-Mart over the holiday season, where Wal-Mart turned flat screen televisions from a good margin category to a poor one. Tweeters and CompUSA both were badly hurt by Wal-Mart's poison-the-well strategy, and I'm sure Circuit was also. But about a year ago Circuit closed several stores, and a year or two before that they fired all of their commisioned sales people. So it looks like Circuit is to blame for its own woes.