The news comes at a time when the big chains are facing increasing competition from Amazon and other sites that sell items like televisions and laptops. Fry’s Electronics said Wednesday it would abruptly close all of its stores overnight, ending nearly four decades in business.
Best Buy expects 40% of its sales to come from online purchases this year, up from 19% two years ago, and the company said it needed to modify its workforce in response to this change.
CEO Corie Barry told analysts Thursday that earlier this month, Best Buy had been adjusting the mix of full-time and part-time employees in stores, due to “having too many full-time employees and not enough part-time employees. ” As a result of this reorganization, Best Buy laid off 5,000 employees, most of whom were working full time. It also said it is adding approximately 2,000 new part-time positions. Best Buy has about 102,000 employees.
It is the first time that Best Buy has provided a specific number of job cuts, which were first reported by the Wall Street Journal.
Best Buy has been a winner of a pandemic. The retailer saw an increase in sales of items from laptops to kitchen appliances as more Americans worked and cooked at home. During its latest quarter ending January 30, sales at stores open for at least one year increased 12.6% compared to the prior year. However, Best Buy expects demand to slow this year.
The company also said Thursday that it closed 20 of its large stores in each of the past two years and expects to close more this year. Best Buy has 450 store leases that will be renewed over the next three years, and Barry said “there will be higher thresholds for renewing leases as we assess the role each store plays.” The company has about 1,000 stores in the United States.
Best Buy also plans to use more space in the store to fulfill home delivery orders. The retailer is testing new store designs that reduce the size of the sales floors and expand the space dedicated to shipping orders.
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