Best Buy Furloughs 50,000 and Reveals Sales

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Best Buy will furlough about 51,000 employees starting Sunday, said the retail giant.

Many of those employees are part-time workers although the furloughs also include some full time employees.  In all, 82 percent of Best Buy’s full time in-store and in-field (like Geek Squad) employees remain on the payroll.

Since the pandemic hit, Best Buy has seen a 250 percent jump in its online sales, half of which are picked up at the store.  But overall, its sales are at 70 percent of its typical business.

“We have retained approximately 70 percent of our sales compared to last year since moving to our enhanced curbside service model despite the fact that all our domestic stores are closed to customer traffic and approximately 40 of them, particularly in the Northeast, have been completely closed to all business for at least 10 days at our discretion,” said CEO Corrie Barry.

Best Buy has been offering curb-side-pickup-only since March 22. All installation and repairs, including car audio installation has been halted.

The company saw an initial boost in sales in mid March of about 25 percent as people bought computers, kitchen appliances and more to shelter in place.  But those sales have dropped off, resulting in a decline of 30 percent since March 21, said Barry.

The company will continue to pay its furloughed workers’ health benefits and tuition reimbursements for at least three months.

Barry said in a video that Best Buy goes to customers’ homes more than a million times a year, but it halted that business for safety reasons. “We’ve learned a great deal since then and we are working to get back into people’s homes in the near future,” she said, according to CNBC.

The CEO and other top executives are taking pay cuts. Barry will receive half her salary, others will take a 20 percent cut through September 1 or later.  The board of directors will be paid half of their usual fees.

Barry added, “The situation remains very fluid and there is still a great deal of uncertainty, particularly as it relates to depth and duration of store closures and consumer confidence over time. We are taking the steps necessary to resume providing our customers in-home services in the near future…We are also preparing to re-open stores to customers as soon as it is safe to do so, with timing likely to vary at state and local levels…”

Beginning April 19, some corporate employees are participating in voluntary reduced work weeks and reduced pay, as well as voluntary furloughs.

Best Buy has partnered with its founder, Dick Schulze, to create a $10 million employee assistance fund, available to all part- and full-time hourly employees who have been with the company for at least a year. Best Buy and Schulze shared equally in the creation of the fund and the company’s portion was paid by repurposing the majority of its annual corporate giving budget.

The company will provide more information in May with the release of its fiscal Q1 results.

Source: Best Buy, CNBC

 

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