Best Buy Offers Buyouts After 3Q Plunge

Best Buy just announced that their third quarter profits are down 77 percent over all. They also announced plants to cut capital expenditures and yes staff members. With the economy in a bind like this it is just too much for electronic big box stores like this to hold on. Lets cross our fingers and hope Best Buy does not follow in the steps of Circuit City.

In the three months ending on November 29th, Best Buy reported a fall to $52 million, or 13 cents a share. Third quarter of last year Best Buy was seeing a profit of $228 million or 53 cents a share. Total revenue rose to $11.5 billion for the third quarter as compared to $9.9 billion just one year ago, partly because of the 181 new stores in Europe.

"We told our employees that 'We recognize that the timing on this stinks,'" Best Buy spokeswoman Susan Busch said. "'We know it's a really tough environment out there. We really want to be respectful of you, we want to give you some choice, we want to give you a generous plan so you can make some informed choices about what's right for you.'"

These are the most challenging times that Best Buy as a company has ever faced. These customer-spending trends could be very long lasting in the end. Best Buy offered buyouts to nearly all of its 4,000 corporate employees, without saying how many they were seeking. They are offering 7.5 months of pay, one year of employer-paid health insurance, one year of employer-paid life insurance and free access to outplacement services to employees who voluntarily give up their jobs by January 5th. Older employees whose age and years of service add up to 60 or more will receive 12 months worth of pay rather than just 7.5.