Click here to view the full story by Melissa Repko on CNBC.com
(04.16.2020) – Starting Sunday, Best Buy will furlough about 51,000 employees, the company said Wednesday. The decision will impact nearly all of its part-time store employees and some of its full-time store employees in the U.S., according to a news release. About 82% of its full-time employees who work in stores or in the field, such as the Geek Squad employees, will continue to be paid.
Best Buy’s shares were down about 7% early Wednesday afternoon. Best Buy shares, which have a market value of $16.8 billion, are down 25% since the start of the year.
Best Buy is one of the many U.S. retailers who have had to adapt and make tough decisions as the pandemic disrupts customers’ lives and changes their behavior. Since March 22, the company’s stores across the country have been closed and it has suspended all in-home delivery, installation and repairs. It has continued to offer curbside pickup at its stores.
Initially, Best Buy continued to pay its employees, but as the disruption drags on, it will stop paying those who will be furloughed. It will continue to cover the total cost of their health benefits and pay their tuition reimbursements for at least three months, according to a news release.
Best Buy saw a sales surge as the pandemic sparked demand for items that help people work from home, students attend school remotely and families stockpile and cook larger quantities of food. During an eight-day period that ended March 20, its sales were up by about 25% as people bought computers, kitchen appliances and more. The company’s quarterly sales through March 20 grew by about 4%, exceeding the company’s expectations for the period.
In recent weeks, however, Best Buy’s sales have dropped off. The company said it’s seen more demand for some items, such as gaming devices, but has had a sales decline of 30% since March 21.
Click here to view the full story by Melissa Repko on CNBC.com
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