When you're bleeding money, the easiest and most expedient short-term fix for a CEO and CFO is to cut, cut, cut. Just ask Jack Welsh.
There are better ways to accomplish it than that. What kind of message does that send employees? What kind of message does that send customers? If things are that bad you either cut people or cut pay or cut benefits or cut other expenses, or some of each of those. I'm not going to pretend I know the correct answers for circuit city, but to just fire people because they make too much and then go hire/train new, cheaper people is as pathetic a bozo move as I've ever heard of. And yes, I was an axe man for a living once.
They would get more credibility by cutting their own salary/benefits FIRST, which is probably nearly the biggest item of fat in the whole company budget anyways. I have zero respect for any CEO/CFO that lays off workers or does wage freezes or cost cutting, if they are not willing to take the same medicine as well as the upper management. In almost every case of this "cost cutting" procedure, the CEOs and upper management continue to operate in the same manner, whilst the front line workers are the ones taking the hits. Then, they wonder why the younger generation is so me-oriented and has no loyalty to anything, or work ethic. Duh, you trained them that they will be shafted at every opportunity. Only an idiot would have company loyalty in such an environment.
"Then, they wonder why the younger generation is so me-oriented and has no loyalty to anything, or work ethic." Agreed. Not only that, they fired 3400 customers.
If the American people could wake up and turn off "Dancing with the Stars"and see what was going on, maybe we could all stand up together and tell the Wal Marts and Circuit Cities to take this job and shove it, we ain't working here no more. A nationwide strike, where we all say go fuck yourself, sell your own crap. We want a raise. Man that would be so sweet.
I just went there and they were the freakin' laziest workers, worse than Best Buy. I asked them where a KVM switch was and the girl pointed to the wall. They had 5 ppl, I kid you not, just standing at a Kiosk chit chatting. She wouldn't leave the kiosk to show me where it was. Some guy with a pierced lip and tats showing standing there too. They definitely need to go.
Several issues to consider... This type of move generates anger within the remaining employees and hurts company morale. Productivity often declines and customer service quality suffers. While you may cut your expenses you have just created 3,400 less customers that will certainly advise others not to buy at CC. Add the fact that such a move is getting large publicity in the media and CC is now stuck in a bad advertising campaign. and the implications go on and on..... It's fairly easy to determine your bottom line savings as far as job cuts and other expenses. It's a whole different story to quantify the economic consequences to your business such as loss of morale, bad press, customer quality, productivity and loss in revenues.
I agree that in general most of these fat cat CEO's need to go. They get 40 mil bonuses not matter what.
Yes, cut, cut, cut, wait for the short term bounce in the stock and then bail out your stock options. Hopefully, there won't be a disgruntled former employee waiting for you at the office front door with a shot gun.
Well, if you think that's bad, imagine they get rid of THEM because THEY are "highly paid", and they hire minimum wage people that know absolutely nothing instead. Given your example, it sounds more like they need to reduce the NUMBER of people and fire the manager that hires those kind of people and ALLOWS that kind of service.