The company has completed a wage management initiative that will result in the separation of approximately 3,400 store Associates. The separations, which are occurring today, focused on Associates who were paid well above the market-based salary range for their role. New Associates will be hired for these positions and compensated at the current market range for the job.You have to love the language: "separation" is corporate-speak for "termination." We aren't firing people, we are merely separating them from their jobs and paychecks. A New York Times article puts it more bluntly:
...executives said the workers were being paid too much and that the company would replace them with new employees who would earn less. It was the second such layoff at Circuit City in the last five years, and it offered an unusually clear window on the ruthlessness of corporate efficiency.Wage freezes have been common for a decade or more, but with this strategy Corporate America has fallen to a new low. I can think of no worse evisceration of the American Dream. We're told that if we work hard we'll get somewhere. But Circuit City is firing rank-and-file employees precisely because they worked hard and got bigger raises from their managers than the bosses at corporate desired. These employees were earning $10-20 per hour, not exactly a princely sum (I wonder how much the CEO makes). Instead of merely freezing their wages, Circuit City decided they'd rather hire a guy at $9/hour to do the same work as the guy earning $18/hour, regardless of how well or for how long the higher-paid employee served the company. They could at least have the decency to disguise it like companies did in the 1980s when older employees were offered early retirement packages to get their expensive butts off the payroll. But in today's environment, Circuit City can shamelessly announce that they are firing expensive people to hire cheaper labor as part of "realigning its cost and expense structure."
What is the incentive for those new $9/hour employees to work hard and dedicate themselves to a company that clearly considers them expendable? Perhaps at performance review time, they will beg their managers, "I know I've done great work here, but please, please don't give me a raise!"
The bastards have not completely abandoned the laid off workers, though. They are welcome to reapply for their old jobs in ten weeks, their personnel files presumably wiped clean of any record of their previous wages.