Firing Savvy HD Sales Guys Hurts Circuit City

When HD retailer Circuit City decided to lay off some 3,400 of its "higher paid" employees earlier this spring, it now knows it may have done some long-term damage to its CE credibility with consumers. Those well-publicized firings that became part of a PR nightmare for the big box store chain (execs had said publicly the laid-off workers were simply being paid too much) may have seriously backfired, according to The Washington Post .

Because many of Circuit City's hundreds of outlets lost the very same floor sales people who had the most knowledge of HD and other complex technology issues, the chain rid itself of a vital ingredient that most consumers demand from a retailer when considering the purchase of a big-ticket item--expertise and clarity.

While the retailer has had to revise some of its fiscal forecasts in light of continuing poor sales of flat-panel and projection TV units, analysts say it's losing business to competitors who have retained their better-trained employees.