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Wednesday, March 28, 2007

I have seen America's future, and it pays seven bucks an hour
Posted by Jill | 6:56 PM
This is what corporatism hath wrought:

A new plan for layoffs at Circuit City is openly targeting better-paid workers, risking a public backlash by implying that its wages are as subject to discounts as its flat-screen TVs.
The electronics retailer, facing larger competitors and falling sales, said Wednesday that it would lay off about 3,400 store workers_ immediately - and replace them with lower-paid new hires as soon as possible.

The laid-off workers, about 8 percent of the company's total work force, would get a severance package and a chance to reapply for their former jobs, at lower pay, after a 10-week delay, the company said.

Analysts and economists said the move is an uncertain experiment that could backfire for the chain. The risks: Morale could sink and customers could avoid the stores. Also, knowledgeable customer service is one of the few ways Circuit City can tackle competitors that include Wal-Mart Stores Inc., they say.

"This strategy strikes me as being quite cold," said Bernard Baumohl, executive director of The Economic Outlook Group. "I don't think it's in the best interest of Circuit City as a whole."

While other companies, such as Caterpillar Inc., have introduced two-tiered wage systems, where newer workers make less, firing workers and offering to rehire them at a lower wage is very rare.

"I don't think you're going to find too many examples," of this, said Ken Goldstein, labor economist for the Conference Board, a business research group. "That certainly has not been a trend we've seen."

Circuit City, the nation's No. 2 consumer electronics retailer behind Best Buy Co. Inc., says the workers being laid off were earning "well above the market-based salary range for their role." They will be replaced with employees who will be paid at the current market range, the company said in a news release.

"We haven't done something called (a) wage management initiative before," said company spokesman Jim Babb. "All companies at one time or another need to go through and make sure their cost structure works with market conditions."

The company's stock rose 35 cents, or 1.9 percent, to close at $19.23 on the New York Stock Exchange.


Yup....treat your employees like dirt by firing them and then "allow" them to "apply" for their jobs back at 1/3 less pay.

I don't know about you, but Circuit City will never again get a penny of MY business. It's time to stop supporting companies that pull shit like this.

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