Circuit City, among the country’s largest electronics chains, has filed for bankruptcy only a week after it announced it would close 115 stores by the end of the year. The closings mean approximately 7,300 workers, or 17 percent of the company’s workforce, will be jobless. Since the company already fired 3,400 “overpaid” workers in March 2007, many of the new layoffs target low-wage employees.
As the U.S. economy worsens and consumer-spending indicators predict one of the worst holiday seasons in decades, large employers are aggressively cutting labor costs as they compete to remain profitable. Circuit City has faced growing competition from Best Buy, Wal-Mart and online retailers.
Since the beginning of 2008, the American economy has shed approximately 1.2 million jobs in the wake of the bursting of the housing bubble and the resulting financial crisis. Circuit City’s stock, which had been worth slightly more than $8.00 in the last 12 months, had plummeted to $0.26 as of Nov. 7.
