About 700 people are expected to lose their jobs at Best Buy Canada.
The layoffs are necessary to “support our stores and serve our customers,” Anna LeGresley, a company spokesperson, told media outlets this week. LeGresley also said that some staff moved to different stores. But the company did not say if any corporate-level employees were laid off or if any stores are slated to close.
Best Buy Canada did not immediately respond to Retail Dive questions regarding the layoffs. The job cuts affect only Best Buy Canada, according to a spokesperson for the U.S.-based parent company.
Best Buy Canada is a wholly-owned subsidiary of Minnesota-based Best Buy Co. Inc. The Canadian subsidiary bills itself as Canada’s largest consumer electronics store. According to its website, the company has about 160 stores and employs about 12,000 people in Canada nationwide with over 1,200 employees at the corporate office in Burnaby, British Columbia.
Two people discussed being let go from Best Buy Canada on TheLayoff.com, an anonymous discussion board focused on job cuts. “They let me go today in Ontario (part-time, permanent), and I received pay in lieu of notice but no statutory severance, because I had worked less than a year,” one person wrote. Another person replied, “I was also laid off today, worked there for over a year in different departments (full-time).” That person also said about 20 others from "a fairly large store" were laid off.
In total, Best Buy has 1,139 stores in the U.S. and Canada. According to the company’s most recent annual report for fiscal year 2022, Best Buy employed 105,000 people. About 55% worked full-time, 35% worked part-time and 10% were seasonal employees. The company reportedly cut hundreds of U.S. jobs last year, citing softening demand as inflation surged.
More recently, Best Buy earlier this month announced it’s launching an in-house marketing company. Best Buy Ads will include paid search, sponsored product listings on BestBuy.com, onsite and offsite display, onsite and offsite video, Facebook and Instagram, and in-store video.
In Q3, Best Buy reported its gross profit rate fell by about 1.5 percentage points and that its operating income was down 45.5% from the same period the previous year. But those financial results exceeded the company’s expectations. Best Buy’s Q3 domestic revenue of $9.8 billion decreased 10.8% versus last year.
The company has not yet reported its Q4 and annual earnings. But in a Jan. 13 note, Wedbush analysts predicted a good fourth quarter but a tough 2023. “While F4Q holiday season sales likely beat the company’s very conservative guidance, the consumer electronics industry outlook has weakened, leading us to now forecast 2023 comps of -3% vs. consensus -1%,” the analysts said.
Bank of America Global Research downgraded Best Buy’s share rating in December to underperform.
“We expect 2023 to be another year where consumer spending gets prioritized toward ‘needs’ (food, fuel, maintenance & repair categories) and away from ‘wants.’ Our recent Home Work survey run in early Dec '22 showed that survey respondents intend to spend less over the next 12 months in the [consumer electronics] category,” said analyst Elizabeth Suzuki.
Looking ahead, Suzuki said Best Buy’s recent initiatives – like focusing more on services – could mitigate the effects of softening demand for consumer electronics. “Other initiatives such as Best Buy Health could boost sales growth beyond our current forecasts, although this remains a ‘show me’ story that may take several quarters to convince investors,” Suzuki said.