Best Buy Reorganisation

In its latest press release, Best Buy describes itself as a 'people powered organisation'. It says that: "The company's Blue Shirt employees are the core of Best Buy. As a people-powered organisation, Best Buy invests heavily in discovering and training employees in customer service, product knowledge and financial acumen. As the store employees are closest to the customers, the company relies on them for their innovative ideas and feedback to enhance customers' shopping experiences".

But in a recent Associated Press piece that quotes Bernstein analyst Colin McGranahan's latest note on Best Buy, we learn that a new reorganisation program will lead to job cuts and lower pay for thousands of Best Buy's Blue Shirts. McGranahan estimates that some 1,000 salaried assistant store managers could be cut, and around 8,000 senior associates could receive pay cuts as they are demoted to more junior sales associate roles.

If we go back to March 2007, this type of action may seem all too familiar. Back then, Circuit City laid off some 3,400 of its highest paid sales associates, replacing them with lower paid - and lower skilled - employees. And we all know what happened to Circuit City.