Monday, April 9, 2007

Circuit City Update

Lots of Circuit City news today:

  • Kiplinger reports that Circuit City has lousy service compared to competitor Best Buy:
    A visit to Palo Alto's Best Buy and Circuit City to pick up a component-video cable illustrates the differences.

    At the Circuit City, it took some effort to find a store employee to ask where to find the cables - and the red-shirted employee who was tracked down misdirected this shopper to cables for TVs.

    At Best Buy, the greeter at the door quickly responded with a more specific question, "What kind of component video?" By asking, he learned the cable's purpose was for a game console and pointed to the video game section.
    Do you suppose firing 3,400 of their most experienced salespeople will improve Circuit City's service?

  • A group of older workers has filed a lawsuit charging Circuit City with age discrimination. According to the LA Times:
    California's Fair Employment and Housing Act, more stringent than those of most states, protects workers age 40 or older. A 2002 amendment to the statute declares that the use of salary as the basis to terminate employees may constitute age discrimination if older workers as a group are negatively affected.
    One of the workers describes the scene of her firing:
    The day she was laid off, (Eloise Garcia) thought she was being called in for a meeting of the store's entertainment committee, which organizes bake sales and other events for employees and charities.

    "I couldn't believe it, after 17 1/2 years, that they were doing it," said Garcia, who lives with her grown son.

    "You could tell they felt bad too. My supervisor was crying and she made me cry. It was awful. There was nothing they could do; they just said, 'I'm sorry, I'm sorry.' "

    Garcia said she got eight weeks of severance pay from Circuit City but would have to find another job.

    Although that will probably mean starting over at a new company for minimum wage, Garcia said she had no choice since she was still paying off medical bills from a fall she suffered a few years back.
  • An El Paso Times article ties these layoffs to the larger issue of outsourcing:
    "In some ways, I think people thought that, somehow, domestic jobs (jobs that can't be moved) are more insulated (from wage-cut pressures). You can't move local retail jobs overseas or to other parts of the country (to save money)," said John Challenger, CEO of Challenger, Gray & Christmas Inc., a Chicago outplacement consulting company.

    This demonstrates in a "particularly blunt way" that "even local jobs are not insulated from those same pressures to cut wage costs," he said.
    Is this the future we want our children to inherit? Workers and consumers get screwed so executives can profit even more? That's not capitalism - that's a perversion of capitalism.

  • Finally, Barbara Ehrenreich (author of Nickel and Dimed) follows this corporate strategy to its logical conclusion:
    But from Allentown to Times Square, no one is commenting on where the new flexibility may be taking us. Time was, not so long ago, when seniority was rewarded with higher pay and other perks. But that higher pay now carries a lethal risk. As a friend who writes software for a major multinational explained to me: "If you ask for a raise, the boss is going to say, 'Why would you want that? It would be like having a bulls-eye painted on your back.'" The more you make, the more tempting it is to fire you.
Tonight SFVYD's E-Board will meet to discuss the next steps in our boycott of Circuit City. I will be recommending a series of actions in front of local Circuit City stores protesting the firings and asking people to shop elsewhere. If you or your organization would like to join these protests, please contact me at

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