Wednesday, March 28, 2007
According to this story from Yahoo! News and the AP, Circuit City has embarked on a cold-hearted corporate strategy to fire its highest paid store workers and then offer to rehire them at a lower wage after a period of time has passed:
A new plan for layoffs at Circuit City is openly targeting better-paid workers, risking a public backlash by implying that its wages are as subject to discounts as its flat-screen TVs.
The electronics retailer, facing larger competitors and falling sales, said Wednesday that it would lay off about 3,400 store workers — immediately — and replace them with lower-paid new hires as soon as possible.
The laid-off workers, about 8 percent of the company's total work force, would get a severance package and a chance to reapply for their former jobs, at lower pay, after a 10-week delay, the company said.
And here is how the company is trying to sell this employee betrayal to the public:
Circuit City . . . says the workers being laid off were earning "well above the market-based salary range for their role." They will be replaced with employees who will be paid at the current market range, the company said in a news release.
I'm not buying it. Whatever happened to loyalty to your employees and rewarding them for past service provided and a job well done? Shoot, corporate strategies like these could singlehandedly revive Ameican unions with their promise of just cause protection. At-will employees like these have no protections against arbitrary dismissals.
I wonder whether enough people will be outraged by this labor strategy that they will not shop the store and any gains made from savings in labor costs will be lost in terms of good will from customers. I also wonder whether the loss in remaining employee morale will significantly affect productivity.
In the end, this is such a short-sighted strategy that it must be the last desperate gasps of a company soon to be out of business.