Best Buy takes financial hit due to pandemic, plans to furlough 51,000 employees
Best Buy, a popular Minnesota-based chain of electronics retail stores, announced Wednesday that due to the pandemic's toll on the economy, 51,000 of its domestic hourly store employees will be furloughed, beginning April 19.
In addition to this, starting April 19 some corporate employees will voluntarily reduce their weekly work hours/pay and participate in voluntary furloughs.
Company executives reporting directly to the CEO will also take a 20% reduction in base salary through at least the first of September.
Best Buy's CEO, Corrie Barry, is taking a financial hit herself by choosing to forego 50% of her base salary and members of the Board of Directors will do the same.
Barry said, “The situation we are all facing as a result of the COVID-19 pandemic is truly unprecedented. As we previously communicated, we made the decision for the health and safety of our customers and employees to shift our stores to a temporary enhanced curbside service-only model starting March 22. At that time, we also suspended all in-home delivery, installation and repairs.”
Barry continued, “I am so incredibly proud of our teams’ execution – they seamlessly implemented a new and highly effective operating model in a matter of 48 hours across our entire store base. We are fulfilling essential technology needs for customers in a safe and innovative way, including continuing to provide remote technical advice and support. This time of working, learning, cooking, entertaining and, importantly, connecting across the country from home only underscores our strategy and purpose: to enrich lives through technology.”
In addition to the aforementioned furloughs and reduced hours/salaries, the following changes are set to take place in Best Buy stores across the nation:
-Lowering merchandise receipts to match demand with a focus on essential items for our customers
-Extending payment terms in partnership with key merchandising vendors
-Reducing promotional and marketing spend aligned to temporary operating model
-Lowering capital spend to focus on mandatory maintenance or high-value strategic areas
-Suspending 401(k) company matching program
According to Business Wire, the company has partnered with its founder, Dick Schulze, to establish a $10 million employee assistance fund, available to all part- and full-time hourly employees who have been with the company longer than one year.
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