Best Buy returns to profit, 2,000 manager positions could be slashed
Best Buy (NYSE: BBY) swung to a profit in the most recent quarter, and according to reports, the chain could be slashing about 2,000 of the company's store managers to save even more money.
In its fourth quarter, the company posted a profit of $310 million, compared to a loss of $461 million. Despite the rise in net income, total Q4 sales decreased to $14.47 billion from $14.92 billion last year. Comparable store sales declined 1.2 percent versus a 1.4 percent drop last year. For the year, revenue decreased to $42.41 billion from $43.91 billion in the previous year. Yearly same-store sales declined 0.8 percent.
The company, like several others, faced a tough holiday season as winter storms crippled several of the nation's shopping malls and online shopping kept customers from visiting brick-and-mortar stores. Best Buy said on Jan. 16 that its holiday season was less than stellar, and a few weeks later the company said it was letting go of nearly 1,000 employees at its struggling Canadian unit.
Up next for the world's largest consumer electronics chain are more aggressive cost-saving measures that will save the company about $1 billion annually. Best Buy originally planned to cut costs by $725 million in North America, a target it has exceeded by $40 million.
Under CEO Hubert Joly, Best Buy will continue reorganizing management, cutting jobs and closing unprofitable stores. The company has reportedly begun laying off thousands of midlevel managers nationwide at its 1,056 stores, according to sources familiar with the matter.
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