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Best Buy cuts jobs across the US after sales drop

By Nagasunder in US Employment News, posted August 15, 2022

Best Buy is laying off employees across the US two weeks after warning that sales were worse than anticipated.

A Best Buy spokeswoman failed to say how many individuals were affected by the layoffs, but permanent roles had been cut as the company is "always evaluating and evolving our teams."

She said: “We’re always evaluating and evolving our teams to make sure we’re serving our customers, with an ever-changing macroeconomic environment, including customers shopping more digitally than ever, we have made adjustments to our teams that include eliminating a small number of roles.”

As it prepares for the Christmas season, the company is still making investments in other areas of its business, including home and health care services.

The spokeswoman said the firm has more open roles than the number of employees affected by the cuts.

The Wall Street Journal broke the news first.

It cited people with knowledge of the situation, who claimed that the company has terminated hundreds of store workers during the past week.

As of the end of January, Best Buy employed over 105,000 employees in the United States and Canada, compared to roughly 125,000 employees at the same time in 2020.

The company is laying off workers even as the U.S. jobs market remains strong.

According to the Bureau of Labor Statistics, hiring outperformed forecasts in July as nonfarm payrolls increased by 528,000, bringing the unemployment rate down to 3.5 percent.

Yet some retailers, who saw significant sales growth during the pandemic, are feeling the whiplash of sharp changes in consumer behavior.

After seeing a surge in demand for home theatres, office furniture, and kitchen appliances as well as receiving stimulus funding, Best Buy had previously budgeted for slower sales.

Yet in late July, it cut its sales forecast for the second quarter and full year, saying customers are skipping over big-ticket items as they get hit by price increases.

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As sales demand drops, employees at Walmart, Shopify, and Peloton are all being laid off.

200 corporate workers at Walmart were laid off, according to people with knowledge of the situation.

Shopify laid off roughly 1,000 workers. And Peloton said Friday that it is slashing about 780 jobs.

Amazon’s workforce has reduced too mainly through attrition.

The company’s headcount shortened by 99,000 people to 1.52 million employees at the end of the second quarter after almost doubling in size during the pandemic.

Source: CNBC

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