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Circuit City Cuts 3,400 'Overpaid' Workers
Brady Schutt helps a customer shop for a camera at a Circuit City store in Richmond in December.
(By Steve Helber -- Associated Press)
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And the company said it is exploring "strategic alternatives" for InterTan, an arm of its Canadian division that services electronics, including sale of the operation. Last month, the retailer shut down distribution centers in Columbus, Ohio, and Louisville, and closed 55 international stores; it plans to shut down seven more in the United States
The nation's second-largest electronics retailer has struggled to keep up with rival Best Buy, and Wal-Mart has made an aggressive push in electronics. The three companies fought it out during the holiday season, slashing prices on flat-panel televisions, which hurt Circuit City's profit.
The company saved $130 million in 2003 by eliminating commissions for salespeople, instituting hourly rates and terminating 1,800 jobs.
Jose Macias, 27, of San Diego said he barely survived that round of cuts. His salary translated to $17.70 per hour, and employees who made more than $18 per hour were fired. But this time, he was not as lucky. He and four others at his store were let go yesterday, including one who had worked at Circuit City for 12 years.
"We had a feeling," Macias said. "There were a lot of rumors going around."
Macias said he was told employees who were paid more than 51 cents above a set pay range for their departments were fired. The cap on his full-time job in the computer department was $15.50 an hour. Mascia said he earned $18.72 an hour.
"I'm ticked off that they can just come at you from one day to another, no warning, and oh, you're gone," he said. "I dedicated seven years to them. Loyalty gets you nothing."
Shares closed yesterday at $19.23, up 31 cents, or 2 percent.
