Best Buy Laid Off 5,000 Employees in Response to the Online Shopping Boom
Fry’s Electronics wasn’t the only electronics retailer affected by COVID-19. The Wall Street Journal reported
Fry’s Electronics wasn’t the only electronics retailer affected by COVID-19. The Wall Street Journal reported Thursday that Best Buy laid off 5,000 employees of its 102,000 employees in response to the pandemic-hastened rise of online shopping.
Best Buy CEO Corie Barry said in an earnings report that “online sales grew almost 90{2f36692215c92488191f15c49f485bc8da437d4cca01014075d40c79880301cc} to a record $6.7 billion and made up 43{2f36692215c92488191f15c49f485bc8da437d4cca01014075d40c79880301cc} of our total Domestic sales” in the 13-week fourth quarter of 2021 that ended on January 30.
But that doesn’t mean the company’s brick-and-mortar stores were obsolete. Quite the opposite: Barry said, “almost two-thirds of our online revenue was either picked up in store or curbside, shipped from a store or delivered by a store employee.”
So why did Best Buy lay off 5,000 of its employees and say that it plans to close some of its stores this year? According to CNN Business, it’s because Barry thinks the company has “too many full-time and not enough part-time employees.”
That makes sense from an economic perspective. Many states offer protections to full-time workers that guarantee them some form of paid time off, healthcare, and other benefits. Part-time employees aren’t eligible for those so-called perks.
Best Buy also said that it expected the sales growth it experienced in 2020—it turns out that people buy a lot of new electronics when they’re stuck inside for a year—to slow in the first half of 2021. Reducing its sales staff can help it maintain margins.
It’s a balancing act. One side has Best Buy offering employees cash bonuses for risking exposure to COVID-19 and giving them paid time off to get vaccinated; the other has the company laying off those same employees for greater flexibility.