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Best Buy Continues Job Cuts and Business Restructuring

Best Buy, the US equivalent of Australia’s JB Hi-Fi, has reportedly carried out another round of layoffs and job restructurings last week.

The consumer electronics and appliance retailer cut some of its sales staff and reduced the pay for others, reported The Verge citing current and former employees.

The layoffs appeared to have mostly targeted in-home sales roles called designers, who would go to customers’ homes to help identify products that would work in their space.

Designers who were spared the job cuts were moved to more in-store roles.

Also, pay scales for a similar, existing in-store “consultant” position were revamped.

Best Buy confirmed the layoffs in an email to The Verge but did not specify the number of employees affected by it or comment on the changing pay structure. “Many of our team members were moved to new areas or roles where our customers need it most,” said Best Buy spokesperson Ryan Furlong. He said some employees in Best Buy’s “Design and Consult workforce” — the collection of roles with in-store workers (called consultants) and in-home field sales positions (called designers) — will be transitioned into a new “Premium Designer role.”

The Verge noted that consultants, who previously earned commission on in-store sales, will now be paid based on an average of their previous year’s sales. Consultants refer some customers to designers, who would go to customers’ homes and help them choose smart home gear to fit their space.

Designers would mostly be paid around a base of around $90,840 salary plus commission. Allowing them to earn between $136,000 and $181,000 on average. Those who weren’t laid off will now earn minimum wage, plus altered commission rates that “won’t make up for the drop in pay.”

With just over 1,000 stores, the raw number of designers let go is likely low.

The retailer is also getting out of physical media sales, retreating from the Samsung authorized repair programme, and starting to use generative AI for customer troubleshooting and order support.

Best Buy CEO Corie Barry told investors in February that they should expect layoffs this year. He reiterated that during the company’s first quarter earnings call in May, saying that many of Best Buy’s moves to “right size” its business “are being implemented throughout this year.”

As of early February, Best Buy had more than 85,000 employees. That’s down from nearly 125,000 workers in early 2020 and more than 90,000 employees in early 2023, according to company financial filings.

As ChannelNews reported previously, shares of Best Buy jumped over 10 per cent at the end of May after the big it beat profit forecasts on growing demand for services and notebooks. The retailer who went after profits rather than revenue in the last quarter delivered a 23.4 per cent increase in profits despite revenue falling 6.8 per cent.

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