The pandemic and the shift to digital sales claimed thousands more jobs Thursday when Best Buy announced the cutting of 5,000 workers.
The big box store, which was relatively successful during the worst days of the COVID-19-caused shutdowns across the country, also said it was going to close more stores this year.
The increased competition from Amazon and others selling electronics claimed Fry’s Electronics as another victim. The company said Wednesday that it would close all of its stores immediately.
This new sales frontier has seen Best Buy and other similar companies begin to embrace – or at least prepare for – the shift to online sales.
Best Buy recently has been a go-to for home-bound consumers. During its latest quarter ending Jan. 30, sales at stores open for at least one year increased 12.6% compared with the year prior.
Best Buy said it believes 40% of its sales will come from online purchases this year, up from 19% two years ago. Hence, according to the company, the need for the reorganization.
Company CEO Corie Barry told analysts Thursday that the strategy is due to “having too many full-time and not enough part-time employees.”
Best Buy, with just more than 100,000 employees, said it has created approximately 2,000 new part-time positions; most of the 5,000 released were full-time workers.
Thursday’s report is the first time Best Buy provided a specific number of job cuts, which were first reported by the Wall Street Journal.
Following the earnings call, Best Buy stock dropped $10.52 to just under $103 per share at market close Thursday.
On Friday, it was trading at just over $101 approching noon ET, off significantly from its Monday price of more than $117.