Best Buy Cuts 5,000 Employees with More Stores to Close
Tech retail giant Best Buy has announced plans for a sizeable chop of its employee base – by 5,000 people to be exact. The decision was made in accordance with the retailer’s imminent store closures.
Currently, Best Buy has more than 100,000 employees, which is down by 21,000 (17 per cent) from the year before.
It’s not for lack of sales though; business has surged for the company amid the COVID-19 pandemic. However, this boom has been the result of shoppers staying at home and buying online instead of visiting stores.
Best Buy relays that its online sales jumped by a huge 89% from November 2020 to the end of January 2021, compared with the same timeframe a year earlier.
The retailer estimates nearly 40 per cent of its sales to come from online purchases – a portion that’s up 19 per cent from two years prior. This rising demand has prompted Best Buy to adjust its workforce to cater to where the sales are.
Thought some 5,000 full-time store employees will lose their jobs, it’s reported that 2,000 new part-time workers will come aboard.
In its efforts to pivot and adapt to shifting retail demand, Best Buy is retraining its workers for handling online orders. The company is also focusing on store layouts in order to maximise floor space, which it will repurpose for shipping orders or preparing them for customer pickup.
Best Buy CEO Corie Barry stated: “In addition to our physical stores, our operating model needs to evolve to meet our customers’ changing shopping behaviours that have been accelerated by the pandemic.
“The sudden and lasting shift customers have made to shopping more regularly and seamlessly across all of our channels has forced us to look at how we get our work done.”
The company closed 40 stores over the past two years and expects to close even more in 2021. Best Buy said it has approximately 450 leases coming up for renewal in the next three years.
“There will be higher thresholds on renewing leases as we evaluate the role each store plays,” Barry shared.
Presently, Best Buy has around 1,000 stores in the US.