Newspaper article

Best Buy Cutting 400 Minnesota Jobs in 'Initial Reduction'

Newspaper article

Best Buy Cutting 400 Minnesota Jobs in 'Initial Reduction'

Article excerpt

Best Buy Company, Inc., on Tuesday announced another round of job cuts as part of its ongoing turnaround effort--this time eliminating about 400 people at its Richfield headquarters.

The electronics retailer said that the layoffs are part of an effort that will cut about $150 million in costs. But it marks only the first phase of a plan that CEO Hubert Joly announced in November, which calls for reducing costs by $725 million.

Best Buy described the latest cuts as an "initial reduction" that was "achieved by enhancing the focus on the company's core business, removing management layers, and eliminating operational inefficiencies."

The company said it will implement additional cost reductions later this year, although it didn't specify when or how many more job cuts might be involved.

The latest 400 corporate job cuts were made Tuesday and did not target a specific type of position, according to Best Buy spokesman Jeff Shelman, who added that no in-store sales associates were cut. Meanwhile, no additional store closures are involved in the most recent phase of restructuring.

Best Buy currently employs nearly 8,000 in Minnesota and about 160,000 worldwide, according to Shelman. The company said it will provide more details about its cost-cutting efforts when it announces third-quarter financial results on Thursday.

Brian Sozzi--chief equities analyst at NBG Productions who closely follows Best Buy--said Tuesday's announcement was "definitely expected." He said that corporate cuts fall in line with Joly's previously announced strategies, and the significant cost reduction implies that those eliminated were high-paying jobs.

Sozzi believes reductions at the corporate headquarters and continued investment in store employees is the proper strategy. "You want to keep as many people on the floor as possible to engage customers" and inform them of services such as year-round price matching, he added. …

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