CORPORADOS

CIRCUIT CITY TOSSES OUT 3,400 EMPLOYEES

USA TODAY - Circuit City Stores' decision to lay off 3,400 employees in
order to hire lower-paid replacements is raising questions about the
impact of severe cost-cutting on employee morale. . . Laying off workers
who earn higher pay raises the risk of deflating the morale of employees
who are left behind, says Penelope Trunk, author of Brazen Careerist:
The New Rules for Success. "People left behind are probably thinking
they don't have a future there," Trunk says.

Those hourly workers who are laid off will get severance packages and
can apply for open positions after 10 weeks. . .

The layoffs could have broad impact:

- Other employers could follow Circuit City's lead. . . Seven percent of
companies plan to trim staff levels during the second quarter of 2007,
according to a survey by Manpower. . .

- After layoffs, companies must deal with a demoralized workforce by
reassuring them that the decision is in the best interest of the company
and those left behind. . .

- Employees left behind or rehired later at lower wages could struggle
with productivity, which is common in the wake of corporate
cost-cutting.

Circuit City, which like other electronics retailers faces stiff
competition, reported a loss for its most recent quarter ended Nov. 30,
and its stock price has fallen 39% from its 52-week high. Its share
price rose Wednesday to $19.23, up 1.9%

http://www.usatoday.com/money/industries/retail/2007-03-28-
circuit-city-layoffs_N.htm


LA TIMES - In a note to clients, Goldman Sachs analyst Matthew Fassler
said that after Circuit City's last major pay change in 2003, when it
went from commission-based pay to flat hourly rates, Best Buy's sales in
stores open at least a year gained significantly while Circuit City's
fell.

http://www.latimes.com/business/la-fi-circuit29mar29,0,5607407.
story?track=mostviewed-sectionfront

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