Thursday, February 6, 2003

Circuit City to cut 2,000 jobs, commissions

The Associated Press

RICHMOND, Va. - Circuit City Stores Inc. will cut about 2,000 jobs, or 4.8 percent of its work force, as it changes how it compensates its salespeople and closes more repair shops amid a sales slump, the electronics retailer announced Wednesday.

The company also said it will relocate or remodel more stores this year. Circuit City operates seven stores in Greater Cincinnati; a call to the company to discuss local effects was not returned.

The Richmond-based chain said sales at stores open at least a year fell 2 percent in January compared with the same month last year. Taking that decline into account, the company said it expects earnings for its fourth fiscal quarter to amount to 35 cents to 40 cents a share from continuing operations before one-time charges.

That range would be below the Thomson First Call consensus estimate of 47 cents a share.

In trading on the New York Stock Exchange, Circuit City shares fell 73 cents, or 11.1 percent, to close Wednesday at $5.86.

As part of a change in its marketing strategy, Circuit City said it will stop paying commissions to its salespeople and instead will pay all store employees an hourly rate. The company said the change will allow it to simplify store operations, cut operating costs and serve customers better.

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