The surge in consumers buying home office equipment and video games has sheltered Best Buy from the worst of the COVID-19 crisis, but the retailer will still be forced to furlough 51,000 employees, approximately 18% of its in-store and field workforce. The retailer has retained 70% of its year-over-year sales volumes due to strong e-Commerce sales and enhanced curbside pickup offerings, but all of its physical stores remain closed.
All employees affected by the furlough are hourly store associates, including nearly all part-time workers, and eligible employees will retain their health benefits free of cost for at least three months. The “vast majority” of In-Home Advisors and Geek Squad Agents are still working as Best Buy continues to provide remote technical advice and support.
“I am so incredibly proud of our teams’ execution — they seamlessly implemented a new and highly effective operating model in a matter of 48 hours across our entire store base,” said Corie Barry, CEO of Best Buy in a statement. “We are fulfilling essential technology needs for customers in a safe and innovative way, including continuing to provide remote technical advice and support. This time of working, learning, cooking, entertaining and, importantly, connecting across the country from home only underscores our strategy and purpose: to enrich lives through technology.”
Some corporate employees will participate in voluntary reduced work weeks and furloughs beginning April 19. Best Buy CEO Corie Barry will accept a temporary 50% salary cut, and the members of the Board of Directors will forego 50% of their cash retainer fees through at least September 1. Executives reporting directly to Barry will take a 20% salary cut during this period.
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COVID-19’s impact on sales has been mixed for Best Buy: despite the overall drop, e-Commerce orders have risen 250%, and overall sales grew 25% between March 12 and March 20 as shoppers prepared their home offices and purchased additional appliances to help them store food. However, the initial rush was followed by a steep decline, with year-over-year sales down 30% between March 21 and April 11.
About half of all online orders have been delivered through the company’s contactless pickup service, which has kept most stores operational. However, approximately 40 locations, most concentrated in the Northeast, have remained completely closed to all business for at least 10 days at Best Buy’s discretion.
