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March 28, 2007
CE retailer Circuit City, which announced both store shutterings and a management shakeup last month, has moved forward with the next stage of its restructuring.
In what the company calls “additional changes to improve financial performance,” Circuit City will let go of 3,400 sales people, with an eye towards replacing them with employees willing to work for less. They will also eliminate more than 100 IT jobs, in conjunction with a new deal in which such operations will be handled by IBM.
Employees who were let go on Wednesday will both receive severance packages, and have the opportunity to re-apply for their old positions, albeit at a reduced salary, after ten weeks.
“We are taking a number of aggressive actions to improve our cost and expense structure,” chairman and CEO Philip J. Schoonover said in the company statement. “[These steps] will better position us for improved and sustainable returns in today’s marketplace.”
Circuit City is also planning, as part of its cost-cutting strategy, to sell off its Canadian stores, which are operated under the corporate name InterTAN Inc. and the retail name The Source by Circuit City.
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