News Is Out – Circuit City Is DOA

It was just reported on CNBC that a proposed buy-out by the Golden Gate Group, that would salvage Circuit City as a going concern, fell through. The handful of liquidation companies that were standing by are coordinating their efforts that will result in about 35,000 being laid off. So far there is no announcement from the company, but I doubt that any useful information would be in it anyway. Good luck to a very large group of people that have stuck by while Circuit City tried to make the best of a bad situation.

Does Low Wages Equal Strong Management
Circuit City Is Now Hiring – Cheap

Does Low Wages Equal Strong Management

James O'Toole and Edward E. Lawler III penned an interesting article on Forbes.com. They contend that just the opposite is true; that lower paid staff is indicative of weaker management. From the article:

“In almost all industries, productive, higher-paid workers can more than cover the costs of their salaries and benefits, if they are managed appropriately.”

It seems that their article was inspired by the outrageous actions by Circuit City management. As posted in, Circuit City Is Now Hiring – Cheap:

“This just demonstrates that Circuit City is no longer capable of managing a higher quality sales staff and wants to become a K-Mart style retailer.”

For the last four years American business has been growing and expanding, with over-all profits up over 100%. Now that growth has slowed, mangers are looking to cut staffing to demonstrate their ability to maintain bottom line growth. This is only a short term solution and the problem remains on how to win the race, but with fewer and lower quality horses.

Circuit City Is Now Hiring – Cheap

This is late but still needs to be put out. From a Circuit City press release:

“The company has completed a wage management initiative that will result in the separation of approximately 3,400 store Associates. The separations, which are occurring today, focused on Associates who were paid well above the market-based salary range for their role. New Associates will be hired for these positions and compensated at the current market range for the job.”

“The separations, which are occurring today.” They couldn’t have given a reasonable notice. I’m neither pro or anti unions, but this is a classic example of what takes place if there isn’t one.

From the Circuit City careers page:

"During our history spanning 50-plus years, we have continuously evolved to maintain our leadership in customer service and the consumer electronics industry."

This just demonstrates that Circuit City is no longer capable of managing a higher quality sales staff and wants to become a K-Mart style retailer.

In a previous life I was a Training Director for a company with about 2,000 employees. We purchased all of our AV equipment from Circuit City; they laid it all out, put it together and showed us some tricks that made life easy. What do you think you’ll get now that they are hiring their staff for as little as they can. Would you want to work for a company that has this attitude towards their staff.

Circuit City is officially off my shopping list.