Circuit City to fire more than 3,400 workers Retailer will replace them with new employees paid at market-based rate

The Associated Press
Updated: 12:45 p.m. CT March 28, 2007

RICHMOND, Va. - Circuit City Stores Inc. said Wednesday it plans to cut costs by laying off about 3,400 retail workers, or 8.5 percent of its in-store staff, and hiring lower-paid employees to replace them. It is also trimming about 130 corporate information-technology jobs.

Its shares rose nearly 2 percent in afternoon trading.

Circuit City, the nation's No. 2 consumer electronics retailer behind Best Buy Co. Inc., said the store workers being laid off effective Wednesday were earning "well above the market-based salary range for their role." They will be replaced as soon as possible with employees who will be paid at the current market range, the company said in a news release.

"We are taking a number of aggressive actions to improve our cost and expense structure, which will better position us for improved and sustainable returns in today's marketplace," Philip J. Schoonover, Circuit City's chief executive, said in a statement.

Circuit City employs about 40,000 part-time and and full-time store employees, according to spokeswoman Jackie Foreman. Those being laid off will get severance packages and may apply for any open positions after 10 weeks, Foreman said.

[Some additional hype at the link.]

John