Best Buy to furlough 51,000 hourly workers as sales plummet

The Richfield retailer has shifted all its stores to curbside pick up only.
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Minnesota's Best Buy has announced it will be furloughing 51,000 of its hourly workers during the coronavirus pandemic, which has seen its sales plunge after a shift to curbside pick up.

The Richfield retailer made the announcement Wednesday morning, saying the cuts will affect 40 percent of its total workforce, most of them part-time store workers.

Those who are furloughed in Minnesota qualify for unemployment insurance, which now has had more than 450,000 applicants since March 16, more than double the entire number of applicants statewide in all of 2019. 

The company says it's still retaining 82 percent of its full-time store and field workers on its payroll, including the majority of its Home Advisors and Geek Squad agents.

Best Buy says that it initially saw a jump in sales as social distancing rules were enacted, as people stocked up on consumer electronics and freezers, leading sales to grow 25 percent in the 8 days that ended Mar. 20.

Since then though, sales have plunged 30 percent, with the retailer shifting to a curbside pick-up model on Mar. 22, while closing dozens of stores mainly in the Northeast U.S. where the coronavirus outbreak is particularly severe.

CEO Corie Barry also announced she would be taking a 50 percent cut in her basic salary, while Best Buy directors will forego 50 percent of their cash retainer fees through Sept. 1, while company executives will also take a 20 percent pay cut.

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"The situation remains very fluid and there is still a great deal of uncertainty, particularly as it relates to depth and duration of store closures and consumer confidence over time," she said.

"We are taking the steps necessary to resume providing our customers in-home services in the near future, keeping in mind our overriding priority on the safety of our employees and customers.

"We are also preparing to re-open stores to customers as soon as it is safe to do so, with timing likely to vary at state and local levels. In the meantime, as you would expect, we are focused on making the difficult decisions necessary to ensure that at the end of this crisis Best Buy remains a strong, vibrant company."

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