Best Buy, Geek Squad Slash 2,400 Jobs

  • Tweet  
  • LinkedIn  
  • Facebook  
  • Google plus  
  • Send to Kindle
  • Send to  

The electronics retail giant and its IT tech support subsidiary are cutting staff as part of its ongoing leadership change and turnaround plan.

The news at Best Buy just doesn’t seem to get better. The electronics retail giant last week announced 2,400 jobs across the U.S. would be cut as part of its ongoing turnaround effort. Surprisingly, one-quarter of the cuts are coming from Geek Squad, the IT support subsidiary, which is seen by many as a potential transformation engine for the company.

Best Buy says the job cuts are part of a previously announced restructuring plan, in which 1,800 jobs will be eliminated from the retail store operations and 600 jobs from Geek Squad.

Related articles

Best Buy is struggling to regain its footing following seven out of eight negative sales quarters, steadily declining same store sales and a leadership shakeup following the abrupt resignation of its CEO Brian Dunn following revelations that he had an “inappropriate” relationship with a subordinate.

The struggles and Dunn scandal also took down Best Buy founder and chairman Richard Schulze, who resigned after it was learned that he did not properly report Dunn’s inappropriate activities. Speculation was rising that Schulze is trying to raise capital to buy out Best Buy. The threat was so credible that Best Buy’s interim management paid senior managers retention bonuses to keep them from leaving. However, Schulze is reportedly slowing is buyout bid with sources saying no deal is imminent.

While the retail store job cuts are understandable giving the operation’s declining performance, the Geek Squad positions are less rational. Because Geek Squad operates in both the consumer and commercial IT segments, some see the division as part of Best Buy’s future as a large VAR or managed services company.

Geek Squad this spring embarked on a channel program designed to extend its reach into the business IT market. The channel initiative is essentially a referral program in which partners are bringing service contracts to Geek Squad.  So far, Geek Squad is signing up a number of telephony agents that are referring IT deals that they cannot support independently.

Best Buy is also building a managed services presence through MindSHIFT, the managed services specialist it bought last year for $167 million. MindSHIFT, which operates as an autonomous unit, appears unaffected by the layoffs or the restructuring.

Layoffs and restructuring are often painful, but the Best Buy job cuts seem more like an adjustment than a restructuring. Best Buy has 167,000 employees and Geek Squad employs 20,000 people. The combined job cuts are less than 1.5 percent of the total workforce.

  • Tweet  
  • LinkedIn  
  • Facebook  
  • Google plus  
  • Send to Kindle
  • Send to  

Want to keep on top of all the North American channel news?

More on Channel Business
shadow-banking-web

Shadow IT brings ups as well as downs

While shadow IT poses a threat for solution providers, there are advantages to be found as well

mock3-0913

Channel millennials to learn from older peers with new CompTIA initiative

Initiative may help with 2015 emerging threat of millennial expectations

NY traffic lights

Gigamon launches partner program

Traffic visibility firm includes pre- and post-sales training certifications in new partner program

Sales online and in the shops

Black Friday wearable tech uptake splits industry

Shoppers may have snapped up a bargain wearable device on Friday, but just how much impact will this have when they choose to wear it to work today?

Visitor comments
Add comments
blog comments powered by Disqus
In-depth
Road to city

Evolution to as-a-service a rocky road for VARs

The much-discussed service provider route does not come without repeated bumps in the road for solution providers

team-of-toy-figures-putting-a-final-jigsaw-piece-into-place

EMC’s VMware remains intact — for now

Amid a rapidly consolidating and converging technology market, the storage giant staves off the spin-off of its virtualization software arm and stays ‘whole’

business-help

VARs need to evolve; vendors can help them do it

Who bears responsibility for helping the channel adopt new business models?

charles-foley-watchful

Vendor Q&A Series: Charles Foley, Watchful Software

The latest channel exec to sit in the Channelnomics hotseat is Watchful Software's chairman and CEO