Despite Soaring Sales, Best Buy Cut 5,000 Jobs

During the COVID-19 pandemic's early days, millions of American workers were sent home to do their work. Tens of millions of K-12 and college students were sent home to complete their educational year online. Those people needed devices to use for connecting to online platforms for remote learning, meetings and other work- and school-related activities. Companies like Best Buy saw their sales soar. Laptops, tablets and Chromebooks were out-of-stock for months. Even so, Best Buy just announced that it cut 5,000 jobs this month alone.

Best Buy's Announcement

On Thursday, February 25, Best Buy announced that it laid off 5,000 full-time store workers earlier in the month. They did this even though their sales soared. People who were told to stay at home bought new laptops, tablets, TVs and other gadgets to keep themselves occupied. Best Buy said that it cut the jobs because more people are buying online instead of going into the bricks-and-mortar retail stores. Best buy added that it is going to replace the 5,000 full-time workers with 2,000 part-time employees.

History of Best Buy's Workforce

Best Buy has decreased the size of its workforce over the past year. It had to furlough its workers when it closed its stores during the early days of the pandemic. Many states, such as Ohio, closed non-essential retail establishments for about four weeks. However, Best Buy claimed itself to be an essential business because it was selling the products that people needed for remote learning and working from home, so it never truly shuttered its doors at any time during the pandemic. Best Buy currently has about 100,000 workers. One year ago, it had about 121,000. This is a 17% decrease in its workforce.

What Best Buy Is Doing for the Workers

Best Buy said that it will retrain its workers to help with online order fulfillment. Some of the existing space in its bricks-and-mortar stores is being used to ship online orders or prepare them for curbside pickup. Curbside pickup allows a local customer to place an order and pick it up a few hours later, and they don't have to get out of their car or go into the store to get their item.

Workers Respond to the Layoffs

A group of former and current Best Buy workers has started an online petition. The petition calls on the corporation to compensate employees for lost wages resulting from the cuts. In the petition, workers say that the company started to reduce their hours on January 10. This affected workers at 150 locations. About 792 of the 4,000 signatures were from current employees of Best Buy. The organizer of the petition is a Best Buy worker who works at a location in Omaha, NE.

What the Petition's Organizer Says

The petition's organizer said that workers who have struggled with the sudden loss of up to 40% of their incomes have a lot of uncertainty as to how to proceed. The workers were not told whether or not the reduction of their work hours would be permanent. She added that it has been a stressful experience, and the lack of communication has made it worse.

Best Buy Responds to the Workers' Petition

Best Buy's spokesperson said that it is not a realistic expectation to pay employees for hours that they did not work. That is what Best Buy says the petition is about. Best Buy says that it told all the signers that it disagrees with their claim but supports their right to make the claim. Like other retailers, its business model allows it to adjust staffing numbers and hours in order to meet the current level of customer demand.

Best Buy's Current Market Position

Best Buy's online sales have increased by 89% from November 2020 to January 2021 compared with November 2019 to January 2020. The company's revenue grew 11% and reached $16.9 billion during that quarter. Its profits went up by 10%, reaching $816 million. Those earnings were higher than investors' expectations. Sales at established stores and online rose by 12.6% in the last quarter and were up by 9.7% for the year. Best Buy expects sales to increase 20% this quarter. For the rest of the year, it expects sales to only rise by a total of 1%. There are only so many televisions or laptops that a person or household needs to have at any given time. Its stock value dropped on that statement.

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