In yet another sign of the dwindling retail and job landscape, one in eight employees at Best Buy Co. Incorporated's headquarters in Richfield -- about 500 in all -- agreed to take voluntary buyouts, the company said Thursday.
Whether that figure will be enough to prevent forced layoffs remains to be seen, as the company continues to analyze its revenue and expenses, spokeswoman Susan Busch said.
An exact number of buyouts won't be known until Jan. 16, the deadline to back out of the plan, but the losses represent a 12.5 percent reduction in the workforce at the corporate offices.
The buyouts come in the midst of the worst retail climate in decades, as beaten-down stock markets, unemployment fears and a lingering housing slump have dried up consumer spending.
The nation's largest U.S. chains on Thursday confirmed dire predictions of a dismal holiday shopping season, reporting that sales dropped 1.7 percent in December compared with a year ago, according to the International Council of Shopping Centers. And as part of a wave of store closings that could reach an estimated 73,000 locations in the next six months, Macy's decided to close its store in Brookdale Mall, one of 11 that it will shutter nationwide because of slumping sales.
"There's just no incentive to spend out there," said retail analyst Ken Perkins, president of Retail Metrics. "People are strictly buying what they need, and they're forgoing virtually all other purchases."
December numbers today
Best Buy will release its December sales results today, and Wall Street is not expecting good news. Best Buy is the nation's largest consumer electronics retailer, but it is fighting off competition from discounters such as Wal-Mart Stores Inc., Costco Wholesale Corp. and Target Corp., which carry a growing selection of iPhones, MP3 players, video game consoles and televisions.
Best Buy executives said the company experienced a "rapid, seismic" drop in sales after September's crash in the financial markets, and said October sales at existing stores dropped 7.8 percent.
The company on Dec. 15 offered a voluntary severance package to nearly all of its 4,000 corporate employees, saying it needed to "reduce significant expenses from its corporate payroll." Best Buy President Brian Dunn said at the time that he didn't have "a quota in my head" for how many jobs the company hoped to eliminate to meet cost-cutting goals.
Workers from across the company signed up for the buyouts, including hourly workers and managers, Busch said. Most will leave the company Feb. 12.
Among those taking the buyout was Julie Gilbert, a senior vice president who launched an initiative to make Best Buy stores more female-friendly and to recruit, retain and promote women within the company.
Gilbert said Thursday that she will form a consulting business to take the WOLF program (Women's Leadership Forum) to companies worldwide. She said she already has interest from businesses in London and in Amsterdam, the Netherlands.
"It's time to live out my destiny," she said.
In 2004, Best Buy outsourced about 650 workers in its IT department and 115 others in human resources to Accenture. As part of the move, it eliminated about 160 positions, Busch said.
Jackie Crosby • 612-673-7335