Karma's A Bitch

Circuit City is getting exactly what they deserve. You might remember that they did a mass firing of everyone in their stores who was making too much money a couple months back. Now it turns out they don't have any experienced employees and their service is suffering. And consumers have either figured that out or they just don't like what was done in the first place. Because:

Circuit City fired 3,400 of its highest-paid store employees in March, saying it needed to hire cheaper workers to shore up its bottom line. Now, the Richmond electronics retailer says it expects to post a first-quarter loss next month, and analysts are blaming the job cuts.

The company, which on Monday also revised its outlook for the first half of its fiscal year ending Feb. 29, 2008, cited poor sales of large flat-panel and projection televisions. Analysts said Circuit City had cast off some of its most experienced and successful people and was losing business to competitors who have better-trained employees.

"I think even though sales were soft in March, this is clearly why April sales were worse. They were replaced with less knowledgeable associates," said Tim Allen, an analyst with Jefferies & Co.

In particular, the televisions showing disappointing results are "intensive sales" requiring more informed employees, Allen said. "It's a big-ticket purchase for somebody. And if they feel like they're not getting the right advice or are being misled by someone who doesn't know, it would be definitely frustrating. They will take their business elsewhere."

We're going to need global unions to deal with this global problem of "racing to the bottom" to push down wages. But ultimately, the marketplace will decide on who carries the best service. And right now, they're deciding on Circuit City. Don't be surprised if you see a few "Help Wanted - $$$" signs in their storefronts soon.