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Best Buy Sees 77% Drop in Earnings, Looks to Lose Employees

Posted 12/17/08 at 08:22:51 AM  by Paul Lilly

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Better than expected Black Friday sales weren't enough to offset what has been a supremely disappointing third-quarter for Best Buy. For Q3 2008, Best Buy reported earnings of $52 million, or 13 cents per share on revenue of $11.5 billion. Wall Street was expecting much better numbers to the tune of 24 cents per share. The disappointing earnings represent a 77 percent tumble from the same quarter last year.

"The historic slowdown in the economy and its effect on our business over the past 90 days have been the most challenging consumer environment our company has ever faced," Best Buy CEO Brad Anderson said in a statement. "We believe that there has been a dramatic and potentially long-lasting change in consumer behavior as people adjust to the new realities of the marketplace."

Moving forward, Best Buy will look to restructure starting with offering voluntary buyouts to most of its 4,000 corporate employees, followed by possible layoffs if the buyouts aren't taken.

Rival electronics retailer Circuit City has also been going through financial woes of its own, recently entering into bankruptcy and closing many of its stores.

Image Credit: Flickr insanehank

COMMENTS:3
TAGS: consumer electronics, best buy, business, layoffs, earnings
COMMENTS
avatarFor me, it's more about customer service...

Submitted by Cry of SOMNUS on Wed, 12/17/2008 - 10:19am

I have bought many things from Best Buy in the past, but their immature sales associates have been the sole reason for me not spending a majority of my money there. There really isn't a difference between them and fast food workers when it comes to technical knowledge. Every time I give them a try, some kid who thinks he/she knows it all always has to drive me away as a customer.

The economy may be slowing down, but people are still buying PCs. Although people who rely heavily on the "expert knowledge" of Best Buy employees may not be shopping for any new trends, gimmicks, or pretty tech, we business owners still have investments to make.

I was preparing to spend thousands on software and hardware for my business two weeks ago, and I made a point to shop around locally...although I have built all of my computers and assembled my own laptops...simply because I wanted to spend my money locally with times the way that they are. But, after a rude sales associate spoke briefly to me, and then refused to help me for 45 minutes, I decided that stimulating the local working force with my money wasn't worth it for that kind of inconvenience.

I am still buying DVDs, CDs, games, and software. My clients still need computers. Better service would have earned them our money...plain and simple.

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avatarDon't forget they stock

Submitted by kleinkinstein on Wed, 12/17/2008 - 9:39am

Don't forget they stock washers, dryers, coffee makers and vacuums too!

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avatarThe Economy?

Submitted by captrespect on Wed, 12/17/2008 - 9:25am

Is it the economy or is it because everyone already owns an xbox/ps3/wii, big screens and dvd players?  Also with netflix, redbox and blockbuster, itunes etc, why buy cds or dvds anymore?

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