-Caveat Lector-
Begin forwarded message:
From: [EMAIL PROTECTED]
Date: March 30, 2007 6:10:10 PM PDT
To: [EMAIL PROTECTED]
Cc: [EMAIL PROTECTED], [EMAIL PROTECTED], [EMAIL PROTECTED]
Subject: A Trend Begins: Big Companies to Lower Skilled Workers'
Pay to Minimum Wage
CIRCUIT CITY TO FIRE 3,400, HIRE LESS COSTLY WORKERS
By Mark Clothier
Bloomberg, March 28, 2007
http://www.bloomberg.com/apps/news?
pid=20601087&sid=aw.zhHEzMpZU&refer=home
Circuit City Stores Inc., the second-largest U.S. electronics
retailer after Best Buy Co., fired 3,400 of its highest-paid hourly
workers and will hire replacements willing to work for less.
The company said its eliminating jobs that paid "well above''
market rates. Those who were fired can apply for the lower pay,
company spokesman Bill Cimino said today. He declined to give the
wages of the fired workers or the new hires.
Circuit City, based in Richmond, Virginia, also hired Goldman,
Sachs & Co. to study a sale of its 900 Canadian stores.
The moves will reduce 2008 expenses by $110 million and trim $140
million in annual spending in 2009. Sales may be volatile during
the first half of this fiscal year as new sales people learn their
jobs, the company said today in a statement.
``Firing 3,400 of arguably the most successful sales people in the
company could prove terrible for morale,'' Colin McGranahan, an
analyst with Sanford Bernstein & Co., wrote in a note today. ``The
question remains as to whether Circuit City can rebuild in time for
the all-important holiday season.''
The fired employees will get severance pay. Today's job cuts, as
well as plans announced last month to close 600 stores and cut 400
jobs, will result in a $145 million pretax charge in the fiscal
2007's fourth quarter.
Circuit City has paid $10 to $11 an hour, on average, said Rick
Weinhart, an analyst with BMO Capital Markets Corp. in New York.
Entry level pay is closer to $8 an hour for inexperienced workers,
he said.
Executive Pay
Chief Executive Officer Philip Schoonover was paid $8.52 million in
fiscal 2006, including a salary of $975,000. Best Buy CEO Brad
Anderson received $3.85 million, including a $1.17 million salary.
Circuit City is trying to save money after reporting its first loss
in six quarters in December. Its stock, which rose 1.9 percent
today, has fallen 21 percent over the past 12 months as profit from
selling flat-panel televisions plummeted.
Circuit City, along with Best Buy, was forced to slash TV prices
during the 2006 holiday season after Wal-Mart Stores Inc., Home
Depot Inc. and CostCo Wholesale Corp. began selling flat panels for
less.
The job cuts are "one of the most brazen examples of corporate
America run amuck,'' said Greg Tarpinian, executive director of
Change to Win, which represents seven unions and about 6 million
workers. `"It's workers as disposable commodities, put in and put
out based on whatever happens to the stock price.''
Sales Revisions
Sales last fiscal year grew 8 percent, lagging behind an earlier
forecast of as much as 10 percent, Circuit City said today. Sales
in stores open at least a year, a key measure of a retailer's
health, rose 6 percent last year, less than an earlier outlook of
as much as 8 percent. The company will report full fiscal 2007
results on April 4.
Circuit City also said it will eliminate another 130 jobs after
agreeing to outsource some computer jobs to International Business
Machines Corp. IBM got a seven-year contract valued at $775
million to manage some technology operations.
Circuit City shares rose 35 cents to $19.23 at 4:18 p.m. in New
York Stock Exchange composite trading. The Standard & Poor's 500
Index dropped 0.8 percent today to 1,417 points.
Circuit City is considering options for its Canadian unit, InterTan
Inc., which it bought in 2004 for about $260 million. The Canadian
stores, most in shopping centers or strip malls, have been hurt by
competitors with bigger shops and broader selection.
Store Footprints
The more than 900 shops, under the name The Source by Circuit City,
average about 3,000 square feet. Circuit City stores in the U.S.
are as big as 30,000 square feet.
The sales people being fired weren't given an option of taking a
pay cut, spokesman Cimino said.
The job cuts will be `"a challenge for Circuit City,'' said analyst
Weinhart. "These are all fresh faces coming in and certainly
they're less experienced, so I'm guessing it's not going to be a
one- or two-quarter challenge. There's going to be a learning curve.''
In 2003, Circuit City switched employees from commission-based pay
to hourly pay, matching an earlier move by Best Buy.
That switch had a "dramatically negative impact on sales,''
McGranahan said today.
.
See what's free at AOL.com.
www.ctrl.org
DECLARATION & DISCLAIMER
==========
CTRL is a discussion & informational exchange list. Proselytizing propagandic
screeds are unwelcomed. Substanceânot soap-boxingâplease! These are
sordid matters and 'conspiracy theory'âwith its many half-truths, mis-
directions and outright fraudsâis used politically by different groups with
major and minor effects spread throughout the spectrum of time and thought.
That being said, CTRLgives no endorsement to the validity of posts, and
always suggests to readers; be wary of what you read. CTRL gives no
credence to Holocaust denial and nazi's need not apply.
Let us please be civil and as always, Caveat Lector.
========================================================================
Archives Available at:
http://www.mail-archive.com/ctrl@listserv.aol.com/
<A HREF="http://www.mail-archive.com/ctrl@listserv.aol.com/";>ctrl</A>
========================================================================
To subscribe to Conspiracy Theory Research List[CTRL] send email:
SUBSCRIBE CTRL [to:] [EMAIL PROTECTED]
To UNsubscribe to Conspiracy Theory Research List[CTRL] send email:
SIGNOFF CTRL [to:] [EMAIL PROTECTED]
Om
