Circuit City has decided to cut costs by laying off 3400 experienced sales clerks.
To reach its decision, the "New York Times" cited several internal calculations: the giant electronics retailer could save $250 million over two years; consumers are used to receiving bad service; and the layoffs would be a one-day blip in the news.
Some customers might argue that the service wasn't so great before the layoffs, but Circuit City is a major retailer of HDTV sets, so the move left many wondering who will advise customers about the upcoming transition from analog to digital television.
Circuit City, pressured by competing retailers and the consumers' desire for low prices, could not compete in today's market. The "Times" said "they fired the cream of their work force, not even giving those employees a chance to reapply immediately for their job at lower wages until after a cooling-off period of 10 weeks." In doing so, the newspaper said the company engaged in a type of domestic outsourcing.
Christopher R. Martin, an associate professor at Miami University, told the "Times" "in a service economy where all the books say you are supposed to put the customer first, Circuit City is doing exactly the opposite."
Now, who is going to explain HDTV to the customers?