Circuit City spokesman Bill Cimino said the 3,400 layoffs follow a market-by-market review of wages for similar jobs. The review, by the company with help from outside parties, identified workers paid "well above the market-based salary range for their role," the company said. Circuit City had 42,359 employees as of Feb. 28. Those workers will be given severance packages, and Circuit City said it intends to replace them with employees compensated at "the current market range for the job." Mr. Cimino wouldn't provide specifics on the changes but called the practice "not an uncommon occurrence" among retailers.
I really don't know how this helps them in the long run because it effectively destroys employee morale. In a world where people are looking for assistance with TV's, computers, etc. having a demoralized sales force would have to be seen as a hindrance. Instead of firing them, why not offer them their jobs at reduced salaries?
This is another illustration of where I think the pendulum has swung too far in favor of corporations over employees. The Walmart flexible schedule system is another example. The key is going to be how employees begin to regain some clout in the places they work.
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