Did you read this?

Just yesterday, Circuit City announced to the Richmond Times Dispatch newspaper that it was planning to close 150 stores and lay off thousands of employees.  They also will reduce store openings and attempt to renegotiate leases, lower rent or terminate agreements in an effort to regain profitability.

Perhaps a little history is in order, just a short 18 months.

In February of 2007, Circuit City announced that Michael Foss, Chief Financial Officer, would leave the company. “This represents the third departure of a senior executive in the past six months, and the second departure of a top-five executive in the past month” said Goldman Sachs analyst Matthew Fassler in a client note.  Uh-Oh.

Just a month later, Circuit City announced that it had laid off approximately 3400 of their associates who were paid above the salary range for their position in order to cut costs, restaffing with employees within the market range for their position. Associates who were laid off due to the “wage management” decision were provided severance and offered a chance to return after ten weeks, at a market-based salary.   Ouch.

In May 2007, the Post wrote that the layoffs appeared to be ‘backfiring’ and resulting in slower sales.  REALLY?

In April 2008, Blockbuster made an offer for the company, but rescinded it just a few months later.  That can’t be good.

The company has had only one profitable quarter the past year. Financial results have weakened as they have dealt with significant declines in customer traffic, increased competition from rival Best Buy.   And employees that must love workin’ there and helping customers!

On November 2nd, 2008 Circuit City announced to the Richmond Times Dispatch newspaper that it was planning to close 150 stores and lay off thousands of employees.  Can you hear the fat lady singing?

As I’ve said all along, I’m not happy that CC is imploding, and the weakening outlook of shopping over the holiday season wont help any retailer.  But c’mon.  Firing your most experienced workers because they are paid more than the new hires you can get to replace them is just plain bad business.  Stupid too.