Thursday, March 29, 2007
Overpaid Circuit City workers:Kevin Drum flags a story that's been making the rounds: Circuit City is firing workers (technically they're being "laid off") that are being paid too much. From the Los Angeles Times story: (excerpts) The electronics retailer on Wednesday laid off 3,400 people who earned "well above" the local market rate for the sort of jobs they held at its stores.
Company spokesman Bill Cimino said Circuit City wanted to be honest with its sales associates so they would understand the reason for the layoffs. "It had nothing to do with their skills or whether they were a good worker or not," Cimino said. "It was a function of their salary relative to the market."
Among those who lost their jobs Wednesday were 321 people who worked in the Los Angeles area's 44 stores. A total of 621 workers at 90 stores in California were laid off.
Circuit City wouldn't give details about what it paid its nonunion workforce or the prevailing market rates, noting that they widely vary across the country.
Analyst Richard Weinhart with BMO Capital Markets in New York estimated that people who work in consumer electronics stores earned $8 to $13 an hour. So, how much are these retail-sales-Rockefellers getting? The answer is found in a story in Los Angeles' other newspaper, the Daily News: (excerpts) At $15 an hour, Richard O'Neal was one of the better-paid salesmen at the Circuit City in Woodland Hills. His career there ended about 8:15 a.m. Wednesday in a mandatory meeting for workers being laid off.
O'Neal said he was told he can re-apply for his job after 10 weeks - if he's willing to work for minimum wage. Currently, California minimum wage is $7.50 an hour. However, company spokesman Jim Babb said new hires will earn more than minimum wage, though he would not specify an hourly rate.
Timing of the layoffs, two weeks before performance reviews that often come with pay raises, spooked a Circuit City employee who was not laid off and earns $10.50 an hour. He refused to give his name because of a policy that employees not speak to the media. Looks like $10.50 an hour is what you can expect at Circuit City in Los Angeles, which is not a cheap place to live. At 2080 hours a year (52 weeks * 40 hours), that comes to: $21,840 / year And Republicans wonder why there is economic anxiety in this country.
posted by Quiddity at 3/29/2007 04:54:00 PM
18 comments
just so you know, there is another wave coming to fire people! As a current circuit city associate, i can tell you that they fired some of the people who made $0.51 cents over the cap level for there position. But you see they didn't fire them all!!!!! Wave two will come for sure if the sales stay the same or rise!!
i was with circuit city for 11 1/2 years also making $15 an hour. I was once in mgmt and they did cut backs but i kept a job with circuit and was converted from salary to hourly making the same pay. i relocated to a different market and lost $5 an hour due to not being able to do the same job because it wasn't availible, which brought me down to $12. i liked working there thats why i was willing to take the cut and i needed the job. now this has happened out of the blue. its like a slap in the face for being a good loyal employee and tells future employees not to work well because if you do you'll get fired later because your too good. i can't speak for everyone else but i earned every penny i made and then some because i made up for the managers that didn't know how to do things. now they are forced to learn things and do things for themselves. i feel this was a mistake on circuit citys part and its just not because i lost my job but i think about the customers who i have dealt with and they felt good dealing with knowledgeble associates. i think its going to hurt their business in the long run.
I worked for circuit city back in the commision days and when they laid a bunch of ppl off i was one of them, i was rehired and i was getting paid $15.00 hr i was ranked 2nd in the district in services and volume wise averiging over 10% a day in servicses and i got hit again with a slap for doing good. I encourage PPl not to apply for a job at circuit city cause there is no growth in that company, just imagine when you evaluation comes up and you are due for a raise should we be Happy or should we be scared, I belive circuit city is going to shut down its entire stores, and i hope it happens. they do not desrve for customers to buy at circuit city for the reason been that they care about themselfs and not about 3,400 emplyees. This Store has created major issues for familys that they just bought a house,or maybe they are having a baby, this ppl broke hearts and familys,its depreesing that you are loyal to a store and then you get a slap, DONT SHOP AT CIRCUIT DONT SHOP AT CIRCUIT CITY>>>SPREAD the Word
I am one of the ones who was fired/laid off. Basically what CC's actions say is that loyalty, experience, and hard work mean absolutely nothing to them. Some people have suggested that those who were laid off were in fact overpaid and did not deserve the wages they were getting and that they had no desire to get into management. For a few that may be the case, but there were many who DID want to move up but were not offered training by the company. I had been trying to get into the management training program for 2 years but the company seemed uninterested in training me or other associates I knew who wanted to move up. Instead their preference was to bring in external hires, give them immediate training and place them ASAP. I saw this time and time again. It became apparent that the only way to get promoted would be to quit, go work at Best Buy for a few months, and then CC would be interested in giving you a management position.
As if it was bad enough that we got fired for making too much money, they conveniently did it on the 28th of the month, which meant that our benefits expired in 3 days. That's gratitude for you.
I have sons that both have worked for circuit city for a while. Both at the top of there game in sales and service. One got canned in this mess. One didn't, because his recent (Monday) relocation and pay increase for outstanding performance had not gotten into the system by Wed. He then had to declined the increase to save his job. I thought this was a customer service business. Perhaps the should just open a drive though widow w/ a dollar TV menu. Now you can go buy a computer from someone that is paid less and less qualified than some of the illegal imigrants that are crossing the boarders. I am so fustrated. You spend years trying to instill (work hard and you will be rewarded for your efforts) and in one swipe its kicked to the curb. The cost of living goes up and the pay scale goes down? How can you survive. I guess you go to work for a reputible employeer that cares about their customers and employees. I wonder if there are any left. I would hope that these loyal, hard working former employees band together to start a boycott movement or more hopefully that they have grounds for a class action law suit. There is power in numbers. They need to get organized in an effort to sink the whole ship or at least get the Ass that came up w/ this move fired and have him sell thousands of dollars worth of merchandise in an hour for less than $7.75 an hour. The problem is not the service personel. The fish stinks from the head. I don't want to see any others in the same boat just the guys that said OK lets dump the on the little guy so we can keep our bonus. I could go on but its up to them not to sit back and be treat like "S"
My mother worked for this company for 22+ years. She was picked because she is one of the oldtimes that still had a pension, benefits and nice vacation time. She sure didn't make good money but it was enough to be happy and in a couple years she would retire with one of the last benefits available to her the "discount for life" reward. She is now 57 and unemployed for the first time in 2 decades.
i was laid off making $18.50/hour. i worked at circuit for almost 10 years. i've been part-time for the last five of those years as i graduated college and took a full-time position elsewhere. i stayed because the pay was unreal for a part-time gig and it is a good place to work. this is how business works, so i am not bitter. circuit has an obligation first to its shareholders. i made a ton of money at a young age back in the commission days and made a lot of friends. that said, i don't recommend working there unless you take it for what it is: a retail job with limited pay and limited advancement opportunities. good for a teenager or someone who needs a second job.
I will never visit another Circuit City store, period. I hope that a competitor hires every fired worker and drives Circuit out of business.
Are there any competitors? I guess Best Buy.
CompUSA seems to be shutting down all of their stores (at least in the Boston area they all seem to be having closeouts and shuttering up).
There's no Fry's here. I wonder if this is a sign that Circuit City is 'evil' or if it is a sign that they're in some serious hardship financially and they're scrabbling for options to keep afloat.
Don't get me wrong, I think that firing people who are making halfway decent money and replacing them with minimum wage monkeys is wrong. I've experienced it myself. But what I'm wondering is if this is really a sign of significant problems in the retail sector, which could bode very badly for the economy as a whole.
Wal-mart is probably the culprit. They are doing everything they can to muscle into the HDTV market and it has to be hurting Circuit City and Best Buy alike. It's just like when Wal-Mart almost crushed Toy's R Us and Winn-Dixie. We used to hate Wal-Mart for running the mom and pop stores out of business but now it's big box retailers.
circuit has an obligation first to its shareholders.
This from someone who got fired...We truly have been brainwashed.
I think Booby Young should take over CEO Philip Schoonover's place. Get rid of the top 6 that are taking away from the people wanting and needing a job and serving the public with a smile on their face. I will NEVER shop Circuit City again...and I hope the top CEO's are proud of themselves....STUPID MOVE
circuit has an obligation first to its shareholders.
the Koolaid is strong with this one.
Welcome to the fucking "trickle down" economy of the Republican Party. How much do you think Circuit City executives are making? Fuckers.
We need a "trickle up" economy.
Other than short sighted greed by a few, like Circuit City executives, there's no reason why we can't all live large.
circuit has an obligation first to its shareholders.
the Koolaid is strong with this one.
No, he's right. Legally, a publicly-traded company's primary fiduciary responsibility is to maximise the return on investment to its shareholders. They are required to do whatever is necessary to increase their stock price. If that means firiing everyone and hiring chihuahuas for a doggy treat an hour, that's what they have to do. If they do anything else, they risk being sued by the shareholders, or having their executives fired and replaced.
That's why financing your company by selling stock is a bad idea. You've just surrendered control to a bunch of leeches and vultures who don't give a damn about your company; all they want is their money, and they don't care how they get it.
Costco pays their employees really well and makes a nice profit. I don't buy the shareholders will sue unless management is rapacious.
Also, I've read about executives getting raises despite losses in their companies stock prices.
Check out the satire of Circuit City at:
http://cantankerousconsultant.blogspot.com/
I was one of the people let go because I made to much money. How much money is too much. I have never been at a merit review with a pistol to their head demanding more money. They gave it to me on their own free will. I thought I was getting raises because I had been with circuit city for 12 years and won many awards for sales and I was part of their flying training team but it wasn’t because none of that mattered when March 28, 2007 came. This recent decision was no shock to the 9 employees who I was fired with. We knew it was coming but never knew when because Circuit City has been making mistakes for years and years. First there was DIVIX and I thought it was a great idea but they didn't pay the movie company their money. So it failed. Next there was the elimination of major appliances and that was a stupid mistake because there was 30 to 40 percent of markup in them and not to mention the repeat business. Soon after Circuit City got rid of appliances Wal Mart picked it up. Then they fired the whole southern division in Atlanta i.e. District Managers, Regional Vice President. Then they got rid of all the people on commission who were making a lot of money and now you fire people making a decent wage 14-20 and hour. It was all planned out on how to maximize their dollars because they fired on the 28 which left us with 3 days of health and dental coverage left. That was low down and heartless. What do you do when you send a decade of your life working for someone and giving up so much for a job and they just smack you in the face and say see you later. WHAT NEXT CIRCUIT CITY??????
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