Best Buy Co., an electronics and appliance retailer, is considering cutting jobs across the country. The store is working at lower costs and so is trying to shift its business online because of rising demand.
Many store workers that specialize in trading and selling more complex products such as computers and smartphones, dubbed “consultants” inside the firm, this week were informed about their termination, according to people familiar with the matter.
The termination news affected hundreds of jobs across the United States. Best Buy operates in more than 900 US stores, people informed. The job positions of the consultants will be shifted to some smaller similar roles. However, the impacted employees can reapply for positions that are open within the company or obtain severance pay.
“As we shared last month, we’re evolving our stores and the experiences we offer to better reflect the changes in customer shopping behavior, as well as how we organize our teams to ensure we continue to provide our expertise, products and services in the best way possible,” said a spokeswoman for Best Buy.
This is not the first time Best Buy has chosen this step. Over the past two years, Best Buy made numerous job cuts when the demand softened for electronics and appliances as compared to the pandemic period when demand for electronics multiplied.
The retailer has reduced some workers since 2021 and also jobs such as helping the public buy products or plan layouts for home entertainment, stock racks, or labor on the sales floor. Best Buy reduced hundreds of store roles in the Canada region earlier this year.
“Over the past three years we have been optimizing our store staffing model to reflect the changes in customer shopping behavior and to fuel investments in higher wages,” said Best Buy Chief Executive Corie Barry on a call to discuss earnings last month. The spokeswoman said the shift is driven by Best Buy’s current effort to layout store formats, fulfill options, and staff by market.
According to financial filings, Best Buy had around 90,000 employees in the United States and Canada as of January, reduced from nearly 125,00 workers in early 2020
The reason behind the decline is also due to the company’s closure of 70 big stores over the past three years. Moreover, sales through online markets accounted for nearly 33% of United States earnings in January as compared to around 19% in 2020, the company stated last month.
In recent quarters, sales of the company fell sharply as the pandemic rush to buy electronics and appliances lowered as more shoppers shifted spending from electronics to essential goods such as food and beverages amid rising inflation.
For the current year, “macroeconomic headwinds will likely result in continued volatility and we are preparing for another down year for the [consumer-electronics] industry,” said Ms. Barry on the call.
The job market overall has stayed strong even though several companies have laid down workers. The Labor Department said employers made a historically healthy number of workers in March but the smallest in more than two years. The rate of employment has dropped to 3.5%.
The recent layoffs have taken place in McDonald’s Corp. laid off hundreds of workers and even cut their pay packages. Walmart Inc on the other side has closed down stores and roles in the corporate headquarters and e-commerce warehouses.
“While the McDonald’s Brand is in the strongest position it has been in years, we also recognize that our business has grown increasingly complex in recent years,” Joe Erlinger, president of McDonald’s USA, said in the email viewed by the Journal.
“This is not good-bye – But a ‘see you later’ note – I’m cheering for you,” the poem’s closing words read. According to those who had an understanding of the situation, McKinsey & Co. advised McDonald’s on the chain’s restructuring strategy.