Circuit City Layoffs May Have Contributed to Their Demise

Eve Tahmincioglu, a career columnist for MSNBC is questioning whether or not Circuit City's decision to fire 3,400 of their highest-paid clerks and replace them with lower-paid substitutes last year had a major impact on their recent decline. Let's face it, customer service in Circuit City is far from stellar, and ditching highly qualified personnel does nothing to improve that situation. Plus, it is bound to send a shockwave of poor morale through the company. It's one of the first rules of business—spending money on quality employees pays off in the long run.

How big of an impact did it have? Well, it is hard to tell. Obviously, there were a lot of factors that contributed to Circuit City's current situation—but cutting all of those jobs certainly seems like a dumbass move in hindsight. In order to save itself from total destruction, Circuit City is currently planning to eliminate 150 stores and initiate a second round of massive employee cuts. My suggestion: learn from your mistakes and re-invigorate your sales force with "well paid" workers. It's only common sense. [Career Diva]

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