Saturday, March 31, 2007

Money Makes The World Go Round

Circuit City's variation on this is to fire its more highly-paid and more experienced workers and then to let them apply for the same jobs at lower wages:

The electronics retailer, facing larger competitors and falling sales, said Wednesday that it would lay off about 3,400 store workers. The laid-off workers, about 8 percent of the company's total work force, would get a severance package and a chance to reapply for their former jobs, at lower pay, after a 10-week delay, the company said.

Neat, isn't it? Of course Circuit City could have made similar savings by first firing its CEO, Philip J. Schooner, who earned around 2.17 million dollars last year and then letting him reapply at the "market" rate for CEOs.

Now why would a firm openly admit to doing something like this? Could it be a way around possible age discrimination suits? Many better paid workers are not only more experienced but also older.