Best Buy Layoffs: 2,000 Mid-Level Managers Across US Getting Axe

Image: Best Buy Layoffs: 2,000 Mid-Level Managers Across US Getting Axe

Wednesday, 05 Mar 2014 11:45 AM

By Ken Mandel

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Best Buy layoffs are coming, with the company letting go as many as 2,000 mid-level managers in an effort to cut costs and streamline management, according to the New York Post

Sales at the largest U.S. electronics chain dropped 2.6 percent during the Christmas shopping season, in large part because of competition with online retailer The company eliminated hundreds of positions at its Minneapolis headquarters last year and closed poor-performing stores.

This round of layoffs targets the retailer's 1,056 big-box stores and regional offices, sources with knowledge of the plans told the Post.

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In January, Best Buy Canada announced plans to terminate about 950 full-time employees to combine some of its sales departments, the Canadian Press reported. The cuts affected Best Buy and Future Shop stores across Canada.

The U.S. layoffs will affect about 1.4 percent of Best Buy's 145,000-employee work force, according to the Minneapolis Star Tribune. 

The company announced its fourth-quarter fiscal adjusted earnings on Feb. 28 of $1.24 per share, surpassing estimates. Profits were at $293 million, compared to a $409 million loss from the same time a year ago.

According to the Post, the majority of affected managers earn six-figure salaries and oversee product categories at multiple stores. In a memo to employees last month, CEO Hubert Joly wrote that the idea is to allow each individual store manager the "full ability to run their (respective) stores."

Best Buy remains in a transitional period, as it seeks to combine its online presence with brick-and-mortar stores.

"Best Buy is investing in online to help push up its strongest sales channel," wrote Andrew Marder for investing site The Motley Fool. "Online sales grew 19.8 percent last year over 2012, far and away the best result the company managed. More and more, customers are buying online and picking up in-store, giving Best Buy all sorts of opportunities to increase sales — but it has to start online." 

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