Is Best Buy in Big Trouble Thanks to Coronavirus?
The company said Wednesday that it will furlough 51,000 store employees, which consists of nearly all of its part-time employees, beginning on April 19.
Best Buy announced at the beginning of April that it was switching to curbside pickup only, due to the coronavirus pandemic. Now, the nation's largest brick-and-mortar consumer electronics retailer has announced additional steps.
The company said Wednesday that it will furlough 51,000 store employees, which consists of nearly all of its part-time employees, beginning on April 19. The company had previously guaranteed that retail and field employees whose hours had been eliminated would be paid for their regularly scheduled hours through the 18th. The company will retain most of its full-time employees, including Geek Squad agents and In-Home Advisors.
Best Buy also said that some corporate employees would participate in furloughs and voluntary reduced hours, and that CEO Corie Berry and the company's board of directors would forgo 50 percent of their base salaries through at least the start of September. Executives reporting directly to Berry will also take a 20% reduction in pay for the same time frame.
The company will also establish a $10 million "employee assistance fund," with help from its founder and former CEO, Richard Schulze.
The Minneapolis Star Tribune reported Wednesday that Best Buy has been designated an "essential" business, and therefore been allowed to remain open, in every part of the country besides New Mexico and Puerto Rico.
The announcements came as part of a "Business Update Related to COVID-19," which also stated that it has lost 30 percent of its sales, compared to last year, since the switch to curbside-only at the start of the month. However, domestic online sales, Barry said in a statement, have jumped 250 percent over the year before.
"The situation remains very fluid and there is still a great deal of uncertainty, particularly as it relates to depth and duration of store closures and consumer confidence over time," Barry said in the announcement.
"We are taking the steps necessary to resume providing our customers in-home services in the near future, keeping in mind our overriding priority on the safety of our employees and customers. We are also preparing to re-open stores to customers as soon as it is safe to do so, with timing likely to vary at state and local levels."
Best Buy also said that it will lower merchandise orders from some vendors, reducing promo and marketing spending and will suspend 401(k) company matching payments.
According to Statista, Amazon has overtaken Best Buy as the top retailer for consumer electronics in North America, followed by Apple and Walmart.
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons.