Friday, January 16, 2009
Circuit City Shorts Out - Cynicism Survives
34 thousand people will be out of work as Circuit City closes down its stores and shuts off the lights for good. A trip around Blogworld shows that while there's a lot of sympathy for the workers, there's very little to spare for Circuit City and its corporate officers.
A year ago, this was posted on Cynical-C's blog: http://www.cynical-c.com/?p=7078
No time to read? Let me sum it up for you.
In 2007, Circuit City laid off 3400 workers, effectively immediately, and replaced them with people who were paid significantly lower wages. The company targeted its most experienced and best paid employees for replacement and said so plainly. Those workers, the company said, were making more than the industry average. One study showed they were making about 51 cents an hour more than their counterparts at other stores - big, big bucks.
But to be fair, company CEO Philip Schoonover makes less than the industry standard; according to Forbes, he made 2.17 million dollars while comparable executives made 4.25 million.
Circuit City told those 3400 workers they could reapply for their old jobs, at minimum wage with no benefits, after they'd been on unemployment for ten weeks.
The Circuit City Slaughter, as one analyst called it, won the title of "Most Cynical Corporate Move Ever" from one industry watcher.
So after cutting its legs off, Circuit City is now stabbing itself in the head. But the 34 thousand people who worked there are the ones who will bleed.