Best Buy Co. Inc. (Richfield, Minn.) has announced it will offer buyout packages to nearly all its corporate employees in an effort to cut costs. The nation's biggest consumer electronics retailer also said Tuesday it plans to cut capital spending by 50 percent in 2009.
The announcement came after Best Buy reported a 77 percent drop in profits in its third quarter ended Nov. 29, 2008. Profits sank to $52 million this year from $228 million a year ago. Some of that profit loss came from the company’s write-down in its investment in struggling U.K. chain Carphone Warehouse Group PLC (London).
Nearly all of the company’s corporate employees will be eligible for a voluntary separation package in order to reduce corporate expenses significantly but Best Buy also said involuntary reductions in corporate staff may be required, depending on the outcome of the voluntary program.
“The historic slowdown in the economy and its effect on our business over the past 90 days have been the most challenging consumer environment our company has ever faced,” said ceo Brad Anderson. “We believe that there has been a dramatic and potentially long-lasting change in consumer behavior as people adjust to the new realities of the marketplace.”