Best Buy has recently undergone significant internal changes, affecting its workforce and payment structure. These transformations come as the company navigates through shifting market dynamics and a post-pandemic decline in sales, according to insights from current and former employees shared with The Verge.
A Shift in Roles and Staff
The recent staff reductions have primarily impacted roles involved in in-home sales, notably the designers who previously visited customers to offer personalized product recommendations. While the exact number of layoffs remains undisclosed, many of the designers who retained their positions have been redirected to in-store responsibilities. Additionally, adjustments have been made to the compensation packages for in-store consultants.
Best Buy acknowledged the layoffs but did not divulge specific figures or details regarding the changes in pay. Ryan Furlong, a spokesperson for the company, mentioned that some employees from the “Design and Consult workforce” will transition into a new role called the “Premium Designer.”
Adapting to Market Shifts
These changes are part of Best Buy’s ongoing efforts to restructure its operations in response to various factors, including a decline in sales following the surge in consumer electronics spending during the pandemic. CEO Corie Barry had previously hinted at the likelihood of layoffs, which were confirmed two months ago with significant staff reductions within the Geek Squad division. Barry reiterated during the company’s first-quarter earnings call in May that further adjustments were expected throughout the year.
Alterations in Compensation
The adjustment in compensation structures has left many employees grappling with significant reductions in their earnings. While consultants previously earned commissions on in-store sales, they will now receive pay based on an average of their previous year’s sales. For designers, the impact has been more profound, with those who managed to retain their positions facing a drastic reduction in pay. Former employees noted that it was previously feasible to earn anywhere from $90K to $120K annually in the designer role, whereas now they will earn minimum wage with altered commission rates.
Shrinking Programs and Long-term Impact
The reduction in staff extends beyond designers to other teams within Best Buy. A significant portion of the team responsible for store remodels and resets has also been affected by layoffs. Among those laid off were several employees who had dedicated over a decade, and in some cases, more than 20 years, to the company.
Strategic Adjustments Amidst Challenges
In addition to staff layoffs, Best Buy is undergoing strategic adjustments to address declining sales. The company is withdrawing from certain business areas such as physical media sales and the Samsung authorized repair program. It is also incorporating generative AI to enhance customer support and order troubleshooting processes.
Financial Projections and Hope for Recovery
Looking ahead, Best Buy anticipates a decrease in net sales for the first quarter of fiscal 2025, with a projected 6.26% decline compared to the previous year. Despite the challenges, CEO Corie Barry remains cautiously optimistic about stabilizing sales trends as consumers begin to upgrade their electronics. There is also hope for potential market recovery driven by technological innovations such as AI-enabled devices.
Best Buy’s recent organizational changes reflect its ongoing efforts to adapt to evolving market conditions and consumer preferences post-pandemic. While the company faces immediate challenges with declining sales and workforce restructuring, there is optimism for future recovery fueled by technological advancements and consumer demand for upgraded electronics.
