Best Buy intensifies the digital review as it slows down

The electronics retailer has laid off workers and reduced hours for some store workers in recent weeks. The company hired about 102,000 at the end of its last fiscal year, down from about 123,000 earlier this year, CEO Corie Barry said in a call with analysts on Thursday. The decline is mainly due to wear and tear, she said. About 5,000 workers were laid off or chose to take leave after their hours were cut, she said.

Dismissed workers have until Friday to find another job in the company or become eligible for dismissal, according to a “overview of the notice of dismissal” given to workers and viewed by The Wall Street Journal.

“The customer has completely changed the way he thinks about shopping,” Ms. Barry said in a call with reporters on Thursday. “We did everything we could to adapt to the new reality.” After the busy holiday season, the company considered that “we have to adapt our workforce to fit that new reality.”

Traffic to stores and online downloads fell about 15 percent in the three months ended Jan. 30, she said, which means less need for sales staff in physical stores. In addition, the company is fulfilling several part-time roles for flexibility, she said.

Comparable sales, those in stores and digital channels that have been operating for at least 12 months, increased by 12.6% in the three months ended January 30. The company reported a 23% increase in sales in the previous fiscal quarter.

Executives warned on Thursday that growth is likely to slow in the second half of this year. They forecast comparable sales between minus 2% and plus 1% for the new fiscal year. On this comparable basis, sales increased by 9.7% in the fiscal year just ended.

The stock fell more than 6% in mid-morning trading on Thursday.

Best Buy is one of several companies trying to take advantage of pandemic-driven changes in shopping behavior and high sales growth to quickly pursue a new strategy, sometimes with major implications for core workers.

“As part of the Enterprise Best Buy strategy, changes have been made to the operation and staffing of our store to support how we meet the customer where and when they need us, which is changing rapidly in today’s environment.” said the “general presentation of dismissal notices” by the Journal.

Some store workers said layoffs seem the opposite after several quarters of strong growth and difficult conditions for employees. “It’s been tough for the last six months,” said Richard Canepa, a 23-year-old who worked at Best Buy in Louisiana for five years, most recently as a full-time sales consultant.

Mr. Canepa remained employed throughout the coronavirus pandemic, including working from home and making telephone sales. Earlier this month, the company gave him the opportunity to switch to a part-time role, which would mean losing his health insurance, he said. Instead, he took a vacation and said he hoped to get a job in web development.

Other retailers that reported strong sales during the pandemic have made similar plans to accelerate the strategy. Walmart Inc.,

the country’s largest retailer by revenue, said last week that it will increase investment in technology, e-commerce and automation after a year of Covid-19 sales. This year “prepared us to take the company where we want it to go and do it sooner than we planned,” Brett Biggs, Walmart’s chief financial officer, said in an interview last week. Walmart gives increases to workers, such as shelf storers and store workers who collect online orders, while leaving the minimum wage at $ 11 an hour for others.

Best Buy has seen a more pronounced shift to online shopping during the pandemic than retailers selling food or other products that shoppers still tend to touch and feel. In the most recent fiscal quarter, its online sales rose nearly 90 percent to $ 6.7 billion and accounted for 43 percent of total U.S. sales, almost double the same period last year.

During the pandemic, the company intensified its takeover of online orders and made the transition from more storage space to warehouses and fulfillment operations.

Part of the company’s strategy is to train more store-level employees to do more jobs so that they can easily change tasks or exchange in multiple stores. More than half of the workers have been trained to “flex in different work areas,” said Barry, CEO, in November, and some may add shifts by home delivery or working at various stores.

After the reduction of the workforce last fiscal year, “from here, the question is how can our employees opt for various skills and certifications, so that they can meet the client where they are going,” Barry said on Thursday.

Workers have moved in to make more virtual sales, as well as chat, phone and remote assistance, Ms Barry said on Thursday’s call. The company employs more people in areas such as the supply chain, small parcel delivery and technology, she said.

Store managers and regional managers have known for more than a year that a change of strategy is coming, said a Best Buy store manager. However, the accelerated pace of the new strategy, its timing and redundant workers have hit store morale, the person said.

“The holiday was hard,” said the manager. “We work uncertain hours. We work with potentially infected customers, potentially infected employees. We had the employees give up, the managers gave up for no other reason than they thought they would die. “About a dozen workers were fired in this person’s store, most of them full-time employees,” said the manager.

“Our stock [price] it has gained momentum “, said the manager. “That’s why we were so shocked that they decided to make these layoffs.”

Like other retailers, Best Buy offered workers a number of bonuses during the pandemic. It raised initial wages for American workers to $ 15 in August last year. Earlier this week, he said he would give a new round of bonuses to workers, including those who were recently laid off. It also offers workers a day of paid leave as a reward if they are vaccinated for Covid-19, as well as paid medical leave after vaccination, if necessary.

As soon as it hit the pandemic, Best Buy moved quickly to save cash, current and former executives said. Late last year, the company offered early retirement purchase packages to all corporate employees over the age of 55, down from the traditional 60-year threshold, some of the people said. Best Buy closed its stores to everyone except boarding at the start of the pandemic, and in April it reached about 51,000 workers, including almost all part-time employees.

By June, it began bringing back some of these workers, but in some cases they moved their duties to online fulfillment or to answer customer service questions from their homes.

Some chains have not handled the pandemic as well, and electronics retailers have struggled for years as more purchases have changed online. This week, Fry’s Electronics Inc. he said he would give up business, permanently closing all 30 stores and closing operations.

Write to Sarah Nassauer at [email protected]