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Best Buy Offers 4,000 Employees Buyouts
| quote: | Best Buy Co. Inc.’s profits sunk 77 percent in the third quarter, the company announced Tuesday, along with plans to cut capital expenditures and staff.
The Richfield, Minn.-based electronics retailer’s profit fell to $52 million, or 13 cents a share, in the three months ending Nov. 29. In the third quarter of last year, Best Buy posted a profit of $228 million, or 53 cents ashare.
Same-store sales of locations open longer than 14 months fell 5.3 percent during the quarter. Total revenue rose to $11.5 billion third quarter, compared to $9.9 billion one year ago, in part because of revenue reports from Best Buy Europe and gains from 181 new stores.
Best Buy’s CEO, Brad Anderson, said the third quarter of this year was the “most challenging environment our company has ever faced,” and warned that dramatically curtailed consumer spending habits could be long-lasting.
Best Buy was formed in 1966 as the Sound of Music store. It becamse Best Buy in 1983.
On Monday, the nation’s largest electronics retailer announced buyout offers to nearly all of its 4,000 corporate employees, though it didn’t say how many total buyouts it was seeking. There is a Best Buy store in Crossgates Mall in Guilderland.
The retailer is offering 7.5 months of severance pay, one year of employer-paid health insurance, one year of employer-paid life insurance and free access to outplacement services to employees who voluntarily agree to leave the company between now and Jan. 5. Employees whose age plus years of service add up to 60 or more will receive 12 months of pay.
“We told our employees that ‘We recognize that the timing on this stinks,’” Best Buy spokeswoman Susan Busch said. “‘We know it’s a really tough environment out there. We really want to be respectful of you, we want to give you some choice, we want to give you a generous plan so you can make some informed choices about what’s right for you.’”
The company has not set a targeted number of buyouts, Busch said. “Once we have a sense of how many people volunteer to participate in this program, we’re going to have to balance that out with some other decision across the company and decide what our next steps are, but we’re not going to speculate on what those next steps might be,” she said.
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