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Circuit City and the American Dream
An anonymous reader writes "Circuit City said yesterday that it had fired 3,400 of its highest-paid sales staff — 8% of its employees — and will replace them with lower-paid workers. Sign On San Diego called this 'a risky strategy to cut costs that goes beyond the layoffs, buyouts and hiring freezes commonly used by struggling companies.' The fired workers have a chance to apply for lower-paying positions after a 10-week wait, the company said. Quoting a Circuit City spokesman: 'This is no reflection on job performance... We deeply regret the negative impact. Retail is extremely competitive, and if we're going to thrive and operate a successful company... we just have to control costs.' So: work hard, become the best in your field, and get fired so they can offer you a new job 10 weeks later at a lower salary."
"Work hard, become the best in your field..."
Yeah, sorry -- the folks working at Circuit City don't generally really qualify as being the "best in their field", unless you're defining the "field" as "people who work at Circuit City". Besides, Circuit City's not on commission anymore so you can't even argue that these folks were necessarily their top performers.
But let's accept for a moment the premise of this article. If these folks really are such great salesmen, this is opportunity knockin' at their door -- they can get better jobs at higher-end stores, they can start their own higher-end stores, they can get into selling something that has worthwhile commissions involved with it like software or cars or whatever. I mean, let's face it: Being the best sales associate at Circuit City is along the same lines as being the best cook at McDonald's. If that's where your vision ends, that's almost certainly where you belong.
That aside, what offends me most is that this thread is this horrific notion that we've devolved to a point where the meaning of the term "American dream" has mutated from 'boundless opportunity in the marketplace and the ability to move out of the economic class you were born into' to 'lifetime employment at Circuit City'.
Speaking only for myself, if that really were the case then I'd want no part of it.
The American Dream as I understand it is that when you get laid off from a shitty dead-end job you can go out and find or create something better if you have the drive and/or ability for it. And hey, if your lack the skills or the ambition to go out and work to better your situation, you can always reapply -- I'm sure that red shirt will fit just as well in ten weeks as it does now.
Every year during my review, I just pray the words "slashdot.org" aren't mentioned.
Wrong place to cry ... we all just got out sourced!
Turd sandwich... giant douche?
what they want or what they deserve? I know if I worked there, I would hope I could find a better job before they could fire me and would be praying that hundreds of other employees would be doing the same. The next time you visit Circuit City just remember how they value their employees. If they can't be bothered to spend the money on quality help what does that imply about their attitude towards their cutomers.
My humor is probably your flamebait
Either that or they need the stock boost that comes from indiscriminately firing workers - Wall Street loves that.
--- There are two kinds of people, those who accept dogmas and know it, and those who accept dogmas and don't know it
The truth of the matter is that a Circuit City salesman performs a service to the public which is about on par with picking strawberries or washing cars. People who pick strawberries and wash cars make the minimum wage. These types of jobs are not intended to be long careers, they are supposed to put kids and part-timers to work. The stark truth of economics is that if you want a higher wage you have to do something more valuable. Try machining or engine repair.
Circuit City is on it's last legs.
The CC stores I've been in have lots of empty shelves, especially in the home audio area. The center area is mostly CDs and DVDs. They had a decent selection of TVs, which, supposedly, are low margin items, so they're not going to be much help in keeping CC profitable.
This sort of nonsense will continue in retail jobs (and everywhere else) until workers UNITE. There is no sense in taking this sort of abuse. Circuit City employees: your company does not care about you, if you want to receive something like fair compensation for your labor then you have to unite with your fellow employees.
Poor employee morale and low pay create the a social petri dish for employee malaise and discontent. Customer service suffers. People stop shopping there. The company continues to lower prices and pay. A vicious cycle ensues. Soon they declare bankruptcy and blame on it everything except poor management decisions driven by short term bottom line numbers.
One ring to bind them - should probably have more fiber and less rings in their diet.
When clueless sales floor personnel cannot expect to work years for one company and retire with a pension.
Come on! Everyone knows that CEOs are equal in talent and skill to 400 regular employees. They are irreplaceable geniuses. No one could do their jobs for even a fraction of that. Even when they fail they deserve tens of millions of $. It has nothing to do with boards made up of CEOs from other companies who vote for the compensation packages and scratch each other's backs. Nothing.
It is by the juice of the coffee bean that thoughts acquire speed, the teeth acquire stains. The stains become a warning
"In the 1980s capitalism triumphed over communism. In the 1990s it triumphed over democracy."
--David Korten
"Flyin' in just a sweet place,
Never been known to fail..."
It's not so unusual for companies to lay off at the top and hire at the bottom. It IS unusual for them to do it all at once and to come right out and say that's what they're doing. I'm not sure if their honesty is a good thing or a bad thing.
It seems that Circuit City has decided that a more experienced and thus higher-paid salesperson doesn't sell much (if anything) more than a high-school dropout hired right off the street. If that's the case, raises and higher pay simply don't make sense and a switch to a model where they hire people who can't get anything better, never give raises, and accept the resulting high turnover makes business sense. Even if it is pretty much evil.
Yet another corporate management that views the bottom-end labor as a pure commodity. Can they get more warm bodies in to replace those displaced? You sure bet. Can the displaced find sales work elsewhere? Most likely so as well. Apparently, someone missed the day in class when they discussed intrinsic value. If you have someone that's experienced and good at what they do, they are very likely worth more because they know how to be more productive at what they do. They likely know how to sell and market a product, in addition to helping customers find the product that best suits their needs and desires.
Having a knowledgeable and competent sales staff is usually considered a cornerstone of having a good store. Get rid of that, and you're probably competing strictly on price and not on value. Hey, if that's their new business model, then they probably made a good move towards achieving that model. But generally, taking the service out of a service industry usually is a risky plan.
If I were Circuit City's direct competition, I'd seriously consider finding a way to talk to these displaced salepeople. It could be a windfall of people that I wouldn't have to spend too much effort in training myself, and still have an opportunity to weed out any undesirables.
Comment removed based on user account deletion
Having been a manager of sales people, the response to "If you want more money, sell more high commission items" is:
"I quit".
I've seen it done, and, unfortunately, did it myself, once. And my best salesman quit.
People determine their value on what they get paid. If they are valuable to your company(high dollar sale people), pay them more to keep them. Don't force them to make it up in more sales. Someone else will pay them the base they're looking for, in addition to the commission. I'd rather pay one person who has great sales 10% more each year, than two people who are little more than warm bodies taking up space.
A union just gives us the ability to say "if you fuck with one of us, you fuck with all of us". Do you have a problem with workers doing that?
I do when you don't have a choice about joining the union or not, which is generally what happens with unions - and they turn that same attitude back on fellow workers they do not like.
A workers union is a slippery slope to a whole other parallel layer of management above you, and that honestly does not do the company or you any good in the long run.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
"Not that crappy old Circuit City..."
This is just another chapter in an old story. The top management of Circuit City doesn't know what they are doing, so the company has trouble making money, but it is only the employees who suffer.
--
Is U.S. government violence a good in the world, or does violence just cause more violence?
If you don't own your own business you are at the mercy of your employer.
I'm a freelance programmer but also work a 40 hour job that could easily kick me out on the street with little or no reasoning (tho I do trust they won't because of their friendly track record). I might would disagree with their decision to can me, but I wouldn't even go as far as to think it immoral or unkind, unless it really were.. ie. based on race or age. I don't think this case with CC is either one of these. That said, I would like to see Circuit City get a brain and try to revamp their sales approach and store layouts so they could actually compete with best buy. Bad PR decisions like this don't always sort out the underlying issues and can make turning around even harder in the long run.
...why you can't get any help that's of any use from retail clerks. The corporate model isn't geared toward customer service and nobody seems to be understanding this. I don't know what the alternative is, but I'll tell you when someone has earned multiple raises to become the highest paid in a store, most of the time (if not always), especially in a place like Circuit City, it's because they are good at what they do. They are probably the knowledgeable staff that actually help you with issues versus the weekend/school workers that are just there to collect enough to pay for the keg of beer. Nowadays you have to spend all day researching most purchases just to insure you aren't getting screwed because the staff at the store know nothing, the people that stock the shelves know nothing and sometimes even the people at the electronics companies know nothing about what they are making or selling. You get what you pay for I suppose.
This country is out of production and manufacturing and is now relying upon sales, research and services for job growth. The simple fact of the matter is that the children of the largest section of the population that lied on factory jobs is waking up to find themselves forced into retail after high school. Certainly there are colleges, education, etc but like it or not some people don't always have these options. When you are forced to get a job out of high school nowadays it's usually at a circuit city or a walmart. Maybe this is why I agree with the Green Party in saying that they should make $10 an hour minimum wage. The simple fact is that it would force companies to pay a decent living wage for these workers they take for granted, play around with, throw everything on top of and then throw out the door once they start advancing their supposed "career." I for one will never shop at Circuit City again.
Judges and senates have been bought for gold; Esteem and love were never to be sold.
"In the 1980s capitalism triumphed over communism. In the 1990s it triumphed over democracy."
What do employee/employer relationships at Best Buy have to do with democracy? Nobody has subverted representative government here. One particular corporate entity has made a business decision to cut labor costs by getting rid of some of its more highly-paid employees. There's no violation of contract, no usurpation of rights. There is no right to employment in the United States, and never has been.
Read the EFF's Fair Use FAQ
This is why unions exist. I agree with people who say that no-one owes me a job. If they want they can fire my ass just because they want to, to cut costs if they want. They can they agree to rehire me later for less money. However I do not have to work for some company either. I can get together with a bunch other employees and form a union. We can insist on better pay and treatment and insist that we aren't treated like shit. They company doesn't have to listen to us. It can ignore us and fire us all and go out of business if it wants. Then maybe the employees will perhaps get some better health benefits and better pay and contracts that stop the company from abusing its workers. Bottom line: whats good for the goose is good for the gander. If you are gonna insist its a dog eat dog world then sometimes the company get to be bitten too and it too will suffer. So no wining about abusive unions....circuit city asked for this.
It is tempting to believe that a high-paid slashdotter and a walmart greeter are equal. Certainly, in a sense, this is true: in the justice system, they are equal; there is no preference for programmers over greeters. They both receive habeas corpus rights; they both will be read their Miranda rights if arrested. This is also true in terms of political rights: a vote by a programmer is worth as much as a vote from a greeter. I could go on.
However, in an economic sense, individuals are not equal. There are individuals of varying ability that operate in varying fields. Now, suppose that we paid the slashdotter equally to the greeter; what incentive does the slashdotter have to do any more than stand at the door of the company and greet people? What incentive do we provide to the programmer to make him use his domain-specific skills? Could we take the greeter and have him do the programmer's job? Clearly not. So why pay them the same?
As for having a minimum wage that pays enough to do all the things you suggest, the fact is that raising minimum wage raises the price of goods. If you have to pay the greeter $10/hr, then obviously you can't charge the same price as before and make the same profit. The only way that you can have the price of goods stay the same is to fire some of the greeters. So, either we have inflation or we have more unemployment. Inflation would quickly insure that the minimum wage that bought all the things you suggested would no longer do so. Unemployment widens the disparity between those who have jobs and those who don't.
If a college educated person does not make more than a high school dropout, then either the college has not done its job or the student has not done his job. I worked as a bagger in a grocery store four years ago at minimum wage ($5.15/hr, I believe), now I'm walking into a high-paying job ($30+/hr) when I graduate.
I know you didn't major in Economics! The $30 million they "save" on wages will quickly have a major impact on lost sales and other losses. Those $30 million probably paid for their most experienced workers - and now they'll lose sales capacity, knowledge and experience in one fell swoop. And I am not referring to their technical knowledge alone - but the corporate business routines. The corporate machine will not run as smooth. I appreciate the need to save however this is literally cutting of your arms and legs.
They already did this in 2003 and like the article says: "At the time, the move hurt the company's sales, Whalin said."
It's more like the plumber not getting paid by his employers - they will loose sales and skills.
If you want to earn money - invest time and money.
Don't take me for a communist - there was a time when big bosses only got the big bucks when they built a successful firm. Successful in the long term, not just the next quarter. Or am I being nostalgic?
Only three things are certain; death, taxes, and apocryphal quotations - Ben Franklin.
I disagree.
I think there's a very reasonable objection to having your CEO make millions while others makes thousands. The lowly sales drone on the showroom floor is not as skilled or educated as the Boss, nor is he putting in as many hours, nor did he pay his dues by years in college going without sleep and fun to get where he is, etc., but they are both contributing. They are both spending most of their waking hours working at the Company. I think they both deserve a little respect.
The problem here is that the labor isn't always looking for a better-paying job.
Some people don't want to constantly run on the treadmill. Some people don't have endless greed^H^H^H^H^Hambition. Some people have priorities outside of work. Some people want to be able to give 100% for 40 hours a week and receive some stability and long-term value for the commitment and effort they give.
An average person, with modest needs and simple aspirations, who is willing to do the work they are being paid to do, does not deserve to be mistreated.
In Nature, stupidity is a capital offense. In human society, too many get off with less than a warning.
When you have a machine do the job of a human, you take away somethng from the human.
So the pinnacle of humanity was when we were living in caves? From the printing press to industrial robots, machines have eliminated countless jobs that humans used to do. And yet, the human race survives.
How to solve most of our problems: 1.Lots of nuclear plants. 2.Cure aging.
Enjoy taking you car to the dealer to get the spark plugs changed or the transmission fluid topped off.
Haha, funny. It's not just VWs you have to take into the dealer or other service center to have fluid level checked or tuneups done. Cars made by US manufacturers are the same today. As a "shade tree mechanic" I have worked on my own as well as others' cars. I've even rebuilt the engine and tranmission in one of my cars, the only thing I had to take something into a shop for was when I rebuilt the engine for a '78 Monte Carlo I had to take the engine block into a machineshop to have the cylinders bored out. However I have to take my 2000 Saturn, a GM company, in for tuneups and fluid changes. Special tools are required are needed to do this and there's only one use for the tool, which costs a lot if you can find one. Then you have to have the right diagnostic computer as well. On serviceability that old Monte Carlo puts to shame any Detroit car made today.
FalconShould there be a Law?
Looks like we actually agree on something! From what you wrote in your post I thought you didn't grasp the logic described in your reply. Of course, if those people did not produce any value they should be fired. But let's take a closer look at that.
I believe you are still missing the point here; those salaries represent far greater sales than $30 million - they have to in order to pay them! Those salaries probably produced several times over their value in sales (gross). They are losing more income than just the money needed to pay for those salaries. They are just looking at increasing profitability per employee and sale.
So now what they are looking at is hiring slightly cheaper, inexperienced sales people that will not sell for an equal amount - but still cost almost as much. You don't fire the productive and profitable workers! You find the dead weight. Non profitable stores get closed. A pay cut might have been better - but would still impact their sales (motivation).
Sure the company is taking the loss, no dispute. And you know what? Those losses that will accumulate, will have an even greater impact on the very problem they are trying to solve. Now, not only will they have less sales, efficiency and profit - they have just lost their greatest assets. And bad press to boot!