For those who haven't seen this before it's a standard cost cutting deal on commisioned jobs. I've had friends in various industries hit by it. My wife got hit by it 20 years ago when Jewel became Magna overnight.
1) You stop commissions because they really eat into profits. To do this you convert the commissions into a salary increase (less than the commissions but still an increase) and weed out your really good sales people in the process becasue they want commissions.
2) If sales are substantially unaffected next you layoff the people who are still there and getting salaries that are unusually high for your market. Salaries in retail sales run $6-10, not $18.
3) You restaff using part timers,
with no insurance costs, aged 16-24, unmarried, and in good health. Costs drop again.
Main down side is if you have too obvious an age discrimination thing. That's low risk though since age discrimination suits under age 50 don't really have much chance of success.
So which is worse, CC laying off 1500 with possible rehire once they find out they really were overpaid for what they did, or Compusa closing 400 stores and dumping 12000 employees permanently? The Compusa one really screwed me they closed all 3 stores in Tarrant county which means the closest is now about 4 hours away round trip through brutal traffic. If the stores were more profitable there might still be one within a reasonable distance of my home.
Ramblings of an old fart
I had my salary drop in half when I was 32 due to a recession and it was a bitch getting another job.
"Nobody hires you because you are used to making a lot more and won't stay on the job." I finally found a long term stable job where I could build my salary back up after making peanuts for 5 years doing 6-12 month short term jobs. Amusingly, the new "career" was at a place that said i was over qualified and over paid 5 years earlier when I interviewed with them right after getting laid off. The guy who hired me was even the one who blew me off the first time 5 years earlier (he did not remember me
).
PS In spite of what the guberment claims the USA is in a recession again. Look at the layoffs, store closings and price drops. That is a recession no matter how the economists choose to cook the books. $50-100k a year construction jobs are being replaced with $10 service industry jobs (again). Get used to it, it happens every 7 years. It used to be called the business cycle.
All you guys who said they would never be caught making $18 and hour after 20 years... I have bad news for you. Expect to have your income cut in half at least once during your career. (Recessions, market shifts, energy price surges, excessive kids entering your field, out sourcing, overseas partnerships, foreign competition, the list is endless.) So start saving now while you can. Being under employed for 5 years gets real ugly, especially now that personal bankruptcy has been killed off.
BTW I rarely shop at CC anymore.
-Their return policy is one of the worst in the industry.
-When they were comissioned the sales people drove me up the wall pushing stuff. When they went off comission I could not find sales people.
-Their selection is pretty lame.
