Pay cut layoffs hit five workers

Five employees at the Circuit City in Columbia were laid off last week as part of the electronics retailers’ nationwide layoffs because they earned at least 51 cents per hour more than the salary range for their position, Circuit City spokeswoman Jackie Foreman said.

“Retail is an extremely competitive market,” she said. “For us to continue to offer products at prices consumers expect, it is necessary for us to realign our cost and expense structure.”

In an effort to control labor costs, 33 people from eight St. Louis stores, 14 from four Kansas City stores and eight from the Springfield store were among the 3,400 employees laid off nationally March 28.

An average Circuit City store has between 40 and 50 employees, some full-time and some part-time, Foreman said. All of the layoffs were based on per hour salary and don’t reflect workers’ experience, age or any other factor.

Circuit City plans to hire new employees to replace the ones laid off and will pay wages consistent with the market, Foreman said.

Employees who were laid off will receive a severance package and will be able to reapply for their jobs at a lower wage in 10 weeks, Foreman said.

Dave Overfelt, president of the Missouri Retailers Association,

said in the home electronics industry, the competition is more than just Best Buy.

“Think of all the places you can buy an LCD screen or a computer,” he said. “Competition in retail is fierce. You have to look at each cost and make the corporate decision that makes the most sense.”

He said it isn’t unusual for a corporation to readjust salaries and benefits, and layoffs are one of the tools companies look at. The alternative is closing.

“I think what they are trying to do is stay in their markets,” Overfelt said.