Report: Best Buy Demoting 8,000 Senior Sales Associates
A report from New York investment firm Sanford Bernstein says that Best Buy will be eliminating 1,000 assistant manager positions and demoting 8,000 senior sales associates to regular sales positions that would pay 25 percent to 50 percent less than their current salary — causing some to compare them to Circuit City.
The Minneapolis Star-Tribune says that the report was based on conversations with the retailer and has not been confirmed or denied by Best Buy.
"What Circuit City did was a pretty big blunder," said Brady Lemos, who follows Best Buy for Morningstar. "They let their most experienced sales staff go, and it was clear that people who worked there weren't interested in helping you. ... Best Buy must be careful not to do anything to that degree."
Best Buy slashing wages, eliminating jobs in stores [Star-Trib] (Thanks, Amanda!)
(Photo:penner42)
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Question, I don't by electronics. Where is everyone buying this stuff these days? Or are they just not buying, period, obviously most B&M retail is suffering...
Heh, my wife went to our local Best Buy yesterday to buy a CD (yeah, dunno why she didn't do Amazon or Itunes). Anyhow, she said the store was ramshackle...boxes and trash in the floor, none of the items were where they were supposed to be, the selection sucked, the store was nasty...etc. Now usually I recall that store being pretty well-kept, but I told her it was probably because they just did massive layoffs, and employee moral is going to be low, not enough associates on the floor, etc. Sounds like BB is imitating CC...the very last thing you cut is your good employees, that is just common business sense.
Ha-HA! Constructive discharge! I bet we'll see a lot of employees forced to quit or reduce their hours, which was the entire plan.
Hopefully, when they liquidate, there'll be some good deals.
@Penny Plastic: *buy
I did just recall that my dad uses NewEgg a lot, so I guess people are buying stuff online...
Hopefully these responses aren't the typical "omg spergin out" that Best Buy posts usually see.
Anyway, I imagine they're like any company and want to use the recession as an opportunity to restructure. Its sales people are very hit-or-miss, and while I doubt the ability of managers to restructure based on skill due to the company's very "family" (or maybe frat house) nature, it's probably necessary. Wal-Mart is knocking at its door, and Best Buy needs to be able to compete.
Such is the life of retail. If you're caught in the middle management at the wrong time, you get squeezed out.
Last time I was in Best Buy to pick up a mouse, there was no one on the floor to help, not even mouth breathing teenagers. Just absolutely empty. It was almost creepy. And when I went to pay, there was just one register open, with a kid who was having trouble with the machine. The store was in shambles. The mice had all been moved away from the computers and were with the camera accessories!
I mean, seriously?
There is one major difference between what CC did and what BB is doing. TIMING. Those "demoted" sale associates are not exactly in the position to somewhere else for a better job right now. I don't care how good you are at sales, if people are not in the market to buy, they wont spend. Foot traffic inside the stores across the country is down.
I will also laugh when the first person who comes on and says, anybody who shops there is stupid because it is overpriced, then criticize Best Buy for cutting its costs to stay competitive with online retailers.
Claiming that sales staff decisions were responsible for Circuit City's failure continues to annoy. They happened to do so at the height of the market before a devastating consumer-led recession in a discretionary sector of the marketplace. Not a single one of CC's competitors is faring well except Wal*Mart, and really every other retailer is just dancing between the toes of that giant.
@Penny Plastic: When I buy a TV (in the distant future) I'll probably try to get the best deal from a B&M store, but I'm iffy on buying such a large piece of equipment through Amazon.
Computers I only buy online direct from the manufacturer.
@Zclyh3: I doubt it. Circuit city had competition. Best Buy doesn't. (sure, you can get whatever online, but as a B&M store, there are many times people will travel to it over the internet)
Cutting management doesn't stike me as a bad idea, but if they have competant sales staff, those people should be rewarded not demoted. Tell me i can buy cheaper on amazon and get better advice from comments than from your sales staff, there's really no incentive left to leave my comfortable chair and wander about under your glaring fluorescents, is there?
@gaywolverine: If they're halfway interested in video games, Gamestop is having no troubles with foot traffic, profits, or anything. Just because a lot of people hate them doesn't mean you can avoid them. Best Buy is doing a lot to hurt themselves here. What if the economy comes back in time for XMas and they're minus tons of good associates who are now, in turn, helping their competitors? Why don't they just get rid of the non-experienced employees, and have the more experienced ones take a small pay cut and maybe cover a bit more?
Newegg, Woot, Costco, Sam's Club.
My last laptop was from Dell, but the next one will be from one of those places, probably from Costco.
The next TV will be from Costco.
@Penny Plastic:
online is where its at for smaller items, stuff like TV's I still have to go to a electronics store because tvs + no free shipping means you lose all your savings in the shipping. But stuff like like computer parts, cables, sometimes software, all cheaper online even with shipping costs. I recently bought some HD cables for like 6-10$ a piece, same ones in the store were 60-90$ each...now you tell me why theyre in trouble. The internet has messed business up for everyone now, if it saved me money on everything, I would buy everything on the net.
I hear a lot of "support your community" bs on the radio nowadays but besides the overpriced groceries for basic food, I'm not supporting anyone but myself and my family. If they want to make out in this economy start cutting prices, stop building stores the size of costco.
@Dan Seitz:
yea just like the great deals at CC with stuff only being 5-10% off in most cases...jokes. Its crazy, around here I've heard small businesses are getting more customers because people are just tired of dealing with big stores bs. I agree with them but I tend to stick to the online savings.
Sounds like CompUSA as they were in their death spiral...
@Penny Plastic: As previously mentioned, Amazon and NewEgg are the best. I even work in an electronics store and I buy things online.
@Zclyh3:
Laying off the most experienced _liars_ (and replacing them) with low wage ones would be more appropriate.
I didn't have a Circuit City nearby, so I don't know if their sales staff was as corrupt as Best Buy's. I always assumed they weren't, which would mean it's not necessarily a good comparison.
@ADismalScience: Claiming that the staffing decisions helped to kill CC is certainly a supportable assertion. After the massive demotions/firings, the speed at which BB was kicking CC's poor red tush accelerated.
Perhaps CC could have found a buyer or scraped up capital to stay alive if they had not completely slaughtered customer service, with the ensuing diversion of sales to their chief competitor.
@Penny Plastic: In my area there is very little for electronics outside of the crappy departments at Target, Walmart and Kmart, so that means buying pretty much everything online. The nearest best buy is 30-45min away and I am not going that far to pay more for my stuff than online price. I would rather just wait a few days and have it shipped from a reliable company. So yeah, Newegg, Amazon and occasionally ebay for me.
If you want a product to truly fit your needs you pretty much have to go online, since Walmart and Target only stock the most popular models, and if you don't like any of those then you are in trouble, or your paying more for features you won't use, or your paying more for the same product you can get online for much cheaper. But I guess its ok if you just want that iPod that everyone else has.
Very good idea Best Buy....Let's see if we can make nearly all our employees sad...that will make them work harder...
*Not been confirmed or denied by Best Buy,so this is speculation at this point
Okay,now that we ran the disclaimer,here goes...
This will help goose BB numbers in a big way...For a quarter or two. This will,of course ,make Wall Street happy. (Insiders tip-Look to see if the company annouces a stock buy back anytime soon. This is a sure sign that upper management knows that this will wreck the company. The buy back will be their chance to unload their stock to...The company that they are wrecking. The perfect crime)
When the soon to be demoted sales force wakes up and realizes that they are doing lots more work for lots less money (And the upper crust is keeping their house warm with bundles of 100 dollar bills),they are gonna bail. Any of them that are any good will land somewhere else and prosper. That leaves the screw ups, incompetents ,drunks, and incompetent drunks for the rest of us to deal with.
BBY can join CC in the graveyard of dead ticker symbols. the countdown begins...Now.
Uhh.... so which is it Consumerist posters?
Is Best Buy currently able to compete in this marketplace? No? Oh, you're going to go on for 7 paragraphs spergin out about how much it sucks and that you shop Amazon and NewEgg?
Well, they need to restructure! Oh, now you're going to be upset that they're cutting pay and positions to be able to compete? Huh? Maybe they can pay those wages from last year's revenue. I can't wait to see those numbers!
Which one is it? I don't like that company (though I am a Premier member from buying a TV), but according to YOU, they have to do something.
"Let's see, how can we make more money? I know! We'll slash the salaries of the few employees who have any chance of feeling valued enough to be motivated to help the customers and we'll just assume that they won't mind having 50% less money from us. I bet you they'll do EXACTLY THE SAME job and put in the same amount of effort, and I bet you none of them will quit! It can't fail. Wow, I'm smart. That must be why Best Buy pays me the big bucks!"
Geez, the pointy haired bosses at Best Buy are rearing their ugly heads, aren't they?
But if Best Buy goes out of business too, wherever will I buy my overpriced electronics?!?
@Marc Melton: Gamestop also shits on developers because their main product is the used video game- of which they don't share profits with anybody. I won't begrudge them for being a successful company, but I can't ever figure out why someone would save $5 over the new price and buy a used AAA title from them a few days after release.
I was in my local store to find a wireless bridge. Gal I first asked had no idea where to look. Used her walkie-talkie, guy told her they had none and if they did, they would be about $200. I said thanks, walked over an aisle, and found them, and for half that. I won't miss them if they go away.
Wait, I'm confused...is anyone under the impression that anyone working at BBY is knowledgable at all about anything in particular anyway? I'm reasonably sure that if you could just convince a group of monkeys to not fling poo at the customers, you'd get the same level of expert advise...
Where are people going to go to then if Best Buy is gone? Circuit City?
People go where they get easy access to items at a decent or low price. That's what got Best Buy where they are today.
Ahh, the sound of rejoicing! Worst Buy is totally blowing it. I can't wait for that shitty store to go under. A lot of over priced items, nothing on sale ever in stock, mostly useless employees, bait and switch on sale items.
The last is my favorite. Some young idiot tried bait and swtich on me for a dvd player one time. He was very sales aggressive. I kept telling him I only wanted the dvd player that was on sale. I finally just left and went somewhere else.
@kathyl: Are you one of those people who declare that BBuy employees are worthless, know-nothing teens? If not, I guess I raise the question to anybody who is- Do you think they deserve that rate of pay?
@pecan 3.14159265: We bought a 42" LCD TV from Amazon last summer, and I can say that in our anecdotal case, the price, quality, and service were absolutely phenomenal. Their "white glove" contracted delivery was some of the best service I've had... ever.
Everyone repeat after me...
It's not *IF* Best Buy will screw you, it's *WHEN*... and I guess it goes doubly true for employees.
I'm buying stock in Radio Shack. Their money make money.
I don't see why everyone is getting such sandy vaginae over this. In the current economy, taking a pay-cut is FAR better than losing your job altogether.
@MustyBuckets:
True, but when you start getting Wal-mart level service from the underpaid know-nothings, why not go to Wal-mart?
I hate to do this, but I'm going to defend Best Buy a little bit.
I bought a camcorder from them online last Friday, and it went on sale in the ad the next day. By the time I saw the ad, the item had shipped. I called them up, gave them the order number and they credited my CC right then with out any issue.
I don't mind the stores being empty, there's no one pushing warranties on you, and I'm usually looking for a specific item that I can't or don't want to wait for to ship from an online store.
As the only big box electronic place left standing, employees and customers are going to have to get used to monopoly power. (I think that's why they started outlawing it 100 or so years ago.)
@YouDidWhatNow?: While there are some good people who work there, I'm pretty much of the same opinion; I've never received any help at a best buy that I would consider anything more than basic knowledge about the product (ie., more RAM is better than less). I know if I ask their opinion the most I can expect is for them to recommend what's best (or easiest) for them, and then have them try to upsell me on an extended warranty. The most I expect at any retail store is for it to be clean and reasonably well stocked. If the employees can reliably direct me to things, that's a bonus but not expected. Basically my expectations are so low I probably wouldn't notice if they did switch to trained monkeys.
@Blinky987:
Do you really think once a game is sold that a developer is entitled to profits when it gets sold again on the used market? Because that's how it sounds.
Every Brick and Mortar retail store just needs to go out of business so you whiners can buy all your crap off of the internet. In fact, we don't need anymore Targets, Wal Marts or shopping malls. Stay home, read a book by candelight and eat vegetables grown out of your gardens.
Arguing that you can get stuff from Amazon/New Egg cheaper than Best Buys is like arguing that you can get stuff cheaper at a grocery store than a 7-11 convenience store. If every convenience store went out of business, you fools would rejoice.
@MustyBuckets: As soon as I saw this article, I figured this logic is exactly what the BB execs were thinking.
There are a lot of comments here for a story that has not been confirmed.
There is a major restructure going on at BBY.
They are consolidating several positions.
If you know anything about the BBY structure, the changes that they are making make perfect sense.
There are currently too many people in management. They have managers, supervisors, a silly position called a 'senior', and on and on.
Moving some of these positions together will cut expenses, and make for a more efficient enterprise.
As far as the pay cuts for the experienced sales folks... In my experience, most of the sales people really do not know what they are talking about. Some of them can bullshit much better than others, but actual product knowledge is surely lacking. Of course, the manufacturers of the products do not help the situation by constantly changing the product lineups. I mean, how many printer models does HP really need?
@friendlynerd: I'm saying that I'd rather spend $5 more and buy the new copy that supports the people who make the game.
Best Buy's reputation for excellent customer service is going to be ruined.
@sirwired:
CC was dead long before the recession and staff cuts. What it did was a last-ditch effort to save itself, which failed miserably thanks to destruction of demand. There was no scenario in which they could succeed, even if they kept those employees.
The reason Ben makes that argument, though, is because he's conflating two of his editorial missions. 1.) He wants to fight for consumer rights. 2.) He's a populist. If only stores were staffed with highly-paid, consumer-friendly people - then everything would be great!
Except cost control and shitty customer service has created the only really successful retailer in America, Wal*Mart. Ultimately, decisions on the cost side are more effective in business than decisions on the customer service side. Lest ye forget, Best Buy was getting its ass kicked well before it cut these heads. Profit fell what, 97% last quarter? Something tells me it wasn't because the company had 8000 rude people.
I think doing this would essentially be the beginning of the end for Best Buy, just like Circuit City when they laid off all the experienced employees with low wage ones.