When Choice Confuses Your Talent - 401k Options
Carnival of Human Resources is Up!!

Talent Levels Are Down And So Is Same-Store Revenue at Radio Shack...

At least a million blogs weighed in on the recent compensation-driven layoffs at Circuit City, but how many have checked back in to take a look at the quarterly financials?  The HR Capitalist did, and the results speak volumes to where Circuit City is now and where they have been for the last year.  Some highlights of the quarterly financials:Circuit_city

-Profitability is up due to cost-cutting and tightening of inventory levels...

-Debt has been reduced, the company bought back some stock and overall cash levels are up...

-DANGER ON THE TOP LINE (Revenue) - Net Sales are down 14.5% from 1Q 2006 with same-store sales down 9.2% in the same comparison period.  Officially company take on this?  We are always slow in each 1st Quarter, and the wireless business is down, etc...

My take on the whole Circuit City thing has changed after seeing the quarterly report.  While I originally thought the move to slash more experienced workers was short sighted and guaranteed to make their business a commodity, the financials have a "Dead Man Walking" type of feel to them - it was already a commodity and a dead model back in 2006.  The business is shrinking, and even with the more experienced workers in the mix, sales were down on average almost 10% year-over-year in the same stores.  Put yourself in the management role - would you keep more expensive workers if your business couldn't even deliver the same revenue as last year?

It's too bad for the workers impacted, but a 10% drop in same store sales year over year?  With that year in mind, it's surprising the layoffs didn't happen long before.  Look for Circuit City to start closing their least profitable locations in the near future, like the average grocery store chain trying to ward off Wal-Mart (Google news on "Winn-Dixie and store closing") so they can maintain profitability in the face of shrinking revenues...

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