After publicly cutting its payroll by some 800 workers since last year (400 last year and 400 in February 2013), Best Buy (NYSE:BBY) has been quietly laying off more people—in smaller numbers—almost every week, usually on Tuesday, according to a report Monday (Aug. 5) in The Minneapolis Star-Tribune.
The additional layoffs have been regularly happening "over the past several months" and generally hit "from single digits to as many as 25" people each time, the chain confirmed on Monday, according to the newspaper story. Best Buy people have dubbed the staff reduction days "Tornado Tuesdays" and "Termination Tuesdays" the story said.
"When we committed to reducing costs as part of our transformation efforts, we said our first priority was to identify savings in nonsalary expenses," Best Buy spokesperson Amy von Walter told the paper. "But we have also had to make some difficult decisions involving head count, which ultimately will allow us to accelerate our work to transform our business."
This method of headcount reduction—a large public reduction followed by multiple smaller reductions—comes with the very high cost of destroying employee morale (which, to be candid, hasn't been particularly high at Best Buy for quite some time). Even worse, it makes everyone worried about their job, which strongly motivates the best performers to look elsewhere. In effect, it makes it more likely the chain will lose its best people and be left with those who would have the most trouble finding work. At least with mass layoffs, the company retains some of the ability to pick-and-choose who stays.
One employee summed up the fear, when discussing how Tuesdays around the company now feel. "Whenever someone leaves their desk, we think that person just got laid off, when he or she might just be going to the bathroom," said one surviving employee.
The Star-Tribune story quoted one attorney, who specializes in employment law, speculating on one reason why Best Buy is opting for so many smaller layoffs. "Best Buy's strategy allows it to work around a federal labor law that requires large employers to give workers 30 days' notice of major layoffs," the paper said, attributing the paraphrase to Marshall Tanick, with Hellmuth & Johnson. "The Worker Adjustment and Retraining Notification Act (WARN), however, does require employees in some cases to report cumulative layoffs over a 90-day period."
Best Buy's von Walter implied that WARN was not playing a role here. "Over the past year, many have speculated about Best Buy and its intentions, nearly all have been wrong — including in this instance," she said.
- See Minneapolis Star-Tribune story
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