Circuit City to cut 2,000 jobs
RICHMOND, Va. (AP) -- Circuit City Stores will cut about 2,000 jobs, or 4.8 percent of its work force, as it changes how it compensates its salespeople and closes more repair shops amid a sales slump.
The company also said Wednesday it will relocate or remodel more stores this year.
The Richmond, Va.-based chain said that sales at stores open at least a year fell 2 percent in January compared with the same month last year. Taking that decline into account, the company said it expects earnings for its fourth fiscal quarter to amount to 35 cents to 40 cents a share from continuing operations before one-time charges.
That range would be below the current Thomson First Call consensus estimate of 47 cents a share.
As part of a change in its marketing strategy, Circuit City said it will stop paying commissions to its salespeople and instead will pay all store employees an hourly rate. The company said the change will allow it to simplify store operations, cut operating costs and serve customers better.
The company said its customers are increasingly knowledgeable about electronics and technology and are less reliant on salespeople for information.
As part of the changeover, the company will convert some commission-paid salespeople to the hourly pay scale but will eliminate about 3,900 sales positions. At the same time, the company said it will hire "additional hourly product specialists as necessary" and one additional sales manager each at 400 of its stores.