- Best Buy told employees it was reducing jobs and hours for an unspecified number of store workers, according to a Wall Street Journal report.
- The newspaper also noted that reduced hours prompted at least one employee to quit because of lost health insurance.
- A Best Buy spokesperson said in an emailed statement to Retail Dive that the company does not comment on specific personnel matters. The spokesperson added that "customer shopping behavior will be permanently changed in a way that is even more digital" and the company's workforce "will need to evolve to meet the evolving needs of customers while providing more flexible opportunities for our people."
The year 2020 was booming for Best Buy — a year that brought further affirmation of past investments in various sale and fulfillment models, along with other strategies that have made it a traditional category retailer able to compete head-to-head with Amazon and other well-heeled generalists.
Key to the retailer's strategy is digital and omnichannel sales. Best Buy reported a 173.7% spike in online revenue in the U.S. for the third quarter. At the time CEO Corie Barry chalked a spike in comp sales up to Best Buy's "unique capabilities" that includes a "flexible store operating model and ability to shift quickly to digital."
On a conference call with investors, Barry said the retailer, which has boosted its starting wages to $15 an hour, has been experimenting with using stores as a fulfillment hub while deploying a "more educated workforce," according to a Seeking Alpha transcript. The latter means a single employee might try to provide customer service across the entire store, rather than focusing expertise and work hours around a topic area, as Best Buy's staff have in the past.
Barry claimed then that "the concept is not about pull out as much cost as possible" but rather to improve customer service by making the experience so that it is "not quite funky moving around in the store." She added, "Success then is actually you have a more fulsome in-store experience and your associates have the ability to garner more skills to opt into more flexible schedules and to be able to potentially at some point even move new between stores depending on their availability."
Whether Best Buy's operating changes will achieve those ends is an open question. Over the past decades, many major retailers have worked to boost profits by reducing full-time positions, often getting rid of longtime, relatively well-paid category experts in the process. Among them was Best Buy's now-defunct formal rival Circuit City, as well as Toys R Us, also now defunct after decades of steady cuts to store staff and maintenance, as well as a mountain of debt, led to its demise. At the same time as Best Buy cuts store jobs, it is is also adding more engineers and other tech workers, with a commitment to diverse hiring.
For now, though, Best Buy looks like an unstoppable player in its field. In November, Moody's senior retail analyst Charlie O'Shea described Best Buy as being "in rarefied air" among brick-and-mortar retailers," with Q3 showing "the effectiveness of its multi-channel capability, with both store and online performance continuing to benefit from its exceptional execution."
As Best Buy's sales soared last year, it paid hundreds of millions of dollars in cash dividends to investors and repurchased tens of millions of dollars worth of its stock, a corporate practice that many retailers without Best Buy's strong numbers temporarily nixed last year to preserve cash for their businesses.