Another one bites the dust ?
Well, we don’t want to bury the dearly departed before they take their last breath, so let’s just say “Another One Looks Like They’re About To Bite The Dust”. I’m hearing that song from “Queen” more and more often lately. I think you can say a trend is developing.
Based on news reports over the past year, and a syndicated Associated Press column I just read about Circuit City, it looks to us like the end is near. The health of the U.S. electronics retailer “Circuit City” has been in a precipitous decline, and the patient is being wheeled into the ICU. Unfortunately, just like Circuit City, the hospital they’re in fired most of their experienced employees, and replaced them with people earning little more than minimum wage. Talk about poetic justice. Patient care took a dive, but hey, look at all the money they’re saving. Smart. Real smart. Now, the vultures are circling, and it looks like they’ll be calling in the Tibetan monks, to conduct a “sky burial” pretty soon (also see Sky Burial on Wikipedia or this NY Times article on the subject). What a pity. First Computer City, then CompUSA, now Circuit City.
The beginning of the end for Circuit City, in our opinion, was in March of last year, when Circuit City’s CEO, Philip J. Schoonover, decided to fire almost 3,500 experienced employees immediately, and replace them with employees earning little more than minimum wage. This is “employment at will” at it’s very best. No advance notice. No buyouts. No severence. No decency. It’s little wonder that most employees these days, especially in the retail sector, have no dedication or loyalty. It’s every man for themselves.
Sadly, I doubt there is much of anything that the management of Circuit City can do to mitigate the damage done to it’s reputation, either in the eyes of their former customers, or in the eyes of their former and current employees. If I was one of the 3,500 employees who were summarily dismissed in favor of cheaper help, I wouldn’t return to Circuit City under any circumstances. To paraphrase the usual wisdom, fire me once, shame on you; if I give you the chance to fire me twice, shame on me.
I was a customer of Circuit City. I could usually find very knowledgeable employees there to help me make purchasing decisions. When I heard what they had done to their most experienced sales people, I vowed that I would never again set foot in a Circuit City store. I have kept that promise. RIP. Hasta la vista. Good riddance.
- The act of getting rid of something useless or used up: disposal, dumping, elimination, jettison. See “Circuit City”.
Our decision to never again be a Circuit City customer was not so much a result of our concern that they no longer have experienced salespeople. Rather, we were disgusted by the fact that a company we had patronized would do this to their employees. Apparently, many other former Circuit City customers feel the same way we do. Since their decision to fire their most experienced and knowledgeable employees, their sales have dropped substantially. And in the 10 months since Circuit City (NYSE: CC) made this incredibly smart decision, their stock price has plummeted from $22.00 a share to $3.50 a share, an almost 85% loss in value. Their stockholders must be so pleased. In comparison, during this same time period, the major stock indices (Dow Jones, NASDAQ, and the S&P 500) have remained flat, which while not great, is a lot better than shares of Circuit City have done.
Interestingly, Mr. Schoonover came to Circuit City from competitor Best Buy, four years ago, and in two years time he was promoted to CEO. No doubt he and Circuit City’s Board feel he is doing a great job. However, from where we are sitting, it looks like he has done more for Best Buy’s bottom line than for Circuit City’s, since becoming CEO.
For the fiscal year ended February, 2007, Mr. Schoonover received total compensation valued at nearly $7 million. We find that incredible. The 3,500 Circuit City employees who lost their jobs in March probably think that was about $7 million too much. Mr. Schoonover no doubt believes his decisions have been in the best interest of the company and it’s stockholders. RoutingByRumor asks this question; Could the decisions made by the management of Circuit City over the past year have been any worse?
How does the ship’s Captain rationalize it when he is being richly rewarded at the same time his crew is made to “walk the plank”? Mr. Schoonover’s ship has hit the rocks and it’s sinking fast. Will he follow maritime tradition, and go down with his ship, or will he jump ship? Or will the Board of Directors of Circuit City have him follow in the footsteps of his employees by walking the plank?
Aye, Matey. All ashore that’s going ashore.