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Best Buy to furlough 51,000 hourly U.S. store employees

(Reuters) – Best Buy Co Inc said on Wednesday it would furlough about 51,000 hourly U.S. store employees and that its sales dropped about 5{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} in the first two months of the current quarter, as the electronics retailer kept its stores shut due to the coronavirus pandemic.

FILE PHOTO: The company logo for Best Buy is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 22, 2018. REUTERS/Brendan McDermid

The company said that starting next week, some corporate employees would also participate in voluntary reduced work weeks and furloughs, while its top management and board would take a pay cut.

Best Buy, however, would retain about 82{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} of its full-time store and field employees.

The company said sales grew about 25{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} during an 8-day period ended March 20, a day before the company announced its decision to switch to a curbside delivery model, as people shopped for work-from-home equipment, gaming-related products as well as products needed to freeze food.

Best Buy added that domestic online sales surged over 250{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} from a year earlier, with half the sales coming from customers who picked-up their products from stores.

However, store closures and decreased footfall have dented demand, and sales dropped 30{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} from March 21 through April 11, Best Buy said.

“The situation remains very fluid and there is still a great deal of uncertainty, particularly as it relates to depth and duration of store closures and consumer confidence over time,” Chief Executive Officer Corie Barry said.

The company has already withdrawn all financial forecasts for fiscal 2021 and drawn down the full amount of its $1.25 billion revolving credit facility.

Best Buy had nearly 125,000 full-time, part-time and seasonal employees in the U.S., Canada and Mexico, at the end of fiscal 2020, according to an annual filing.

Shares of the company, which will report its results for the first quarter ending May 2, late next month, were down about 6{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} in early trading on Wednesday.

Reporting by Aishwarya Venugopal in Bengaluru; Editing by Vinay Dwivedi

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