Yes, you read that right. Best Buy is laying off 2,400 retail workers, including 600 members of its Geek Squad service team, as of Aug. 1. At the same time, the company is looking to fill other Geek Squad positions around the country — some 4,000 of them. Best Buy spokesman Bruce Hight said those positions will still be filled, and laid-off staff members may apply for them.
The company is trying to right itself following following declining sales in seven out of the last eight quarters, dropping same-store sales, and a leadership shakeup. The Geek Squad layoffs represent 3 percent of the company’s 20,000 workers in the services division, which provides tech support to both consumer and business clients.
The cuts are part of the company’s ongoing restructuring, which includes some realignment of skills, though Hight offered no details.
Michael Pachter, an analyst at Wedbush Securities, told The Wall Street Journal that because Best Buy doesn’t have an advantage on products or prices, its “the only real differentiator” is service and advice.
In March the company announced plans to shrink its number of superstores by 20 percent and open 100 Mobile Stores that put its Geek Squad service front and center.
Its managed services business, a stand-alone unit built from last year’s $167 million acquisition of MindSHIFT, apparently is not affected by the layoffs.
The company last year set up a channel program and recently signed four telephony clients. One of them, Access Media 3, sells broadband, television and voice services to consumers. It’s adding Geek Squad’s troubleshooting services for for PCs, email, MP3s, software and printers to its consumer offerings.
- Best Buy to cut 650 Geek Squad employees [CNET]
- Best Buy, Geek Squad Slash 2,400 Jobs [Channelnomics]
- Best Buy Pares Geek Squad [WSJ]
- Best Buy Tries on Apple’s Sleek Look [WSJ]