Best Buy may be in the process of laying off several thousand employees, acccording to a report.
Inside informatin obtained by the N.Y. Post has 2,000 managers getting the boot. There are no plans to close any stores.
"This is ripping off the Band-Aid," one Minneapolis source told The Post, noting that Joly is making the layoffs in a hurry to avoid uncertainty and prolonged pain.
After posting disappointing holiday sales last month, Best Buy is readying to release its fourth quarter numbers tomorrow morning.
Analysts are projecting fourth quarter revenue in the $14.7 billion range for the consumer electronics retailer, down about 13 percent from the same period last year. At the same time the company will make its full-year 2013 financial report and analysts see it coming in at $42.7 billion, well below the $44 billion posted in 2012. Per share earnings should fall into the $1.01 area for the quarter, down from $1.55 a year ago. Full-year earnings per share are forecast to be down 29 percent to $1.84.
The previous report saw that the retailer struggled during the holidays, but there were also several bright spots, including better delivery on items purchased online. However, with just two days to go before Best Buy's financial report is released industry watchers see the retailer's struggles continuing.
News reports do point out that Best Buy had a better holiday than its financial reports indicated and the company itself said online retail sales during the holidays were excellent. Best Buy said during the holiday period comparable online sales grew 23.5% and this was helped by transformational supply chain execution that included, for the first time, giving far greater access to total company inventory through our newly launched ship-from-store capability available in more than 400 stores.
This last point could prove important since the chain has more than 1,000 stores and could thus greatly increase the size and scope of the program.
There is some question as to whether the uptick in online sales growth was a true indicator of the future or just a temporary blip. Fool.com pointed out there is still room for improvement noting that even if the increase is real Best Buy still only generates 11 percent of its overall revenue online, compared with Gamestop's 15 percent.
Pamela Peerce-Landers on Seeking Alpha noted Best Buys' competition, primarily Amazon and Walmart, did not have stellar holiday periods either and that Best Buy Hubert Joly had noted during the retailer's Jan. 16 financial conference call that the company had grabbed some additional market share.
Other points to look for during the upcoming report is whether Joly discusses the issues that he pegged as important during his financial report in January. These include the company's plan to reduce its cost structure, improved its multi-channel experience, grow its online market presence and whether has been able to improve and personalize the customer in-store experience.
