MINNEAPOLIS (WCCO) – It’s hardly the kind of 10th anniversary surprise that Best Buy employees were expecting.
The sprawling campus at Penn Avenue and Interstate 494 stands as a shining beacon to the importance of retail.
Now, a decade after the company’s corporate headquarters were built, 400 Best Buy employees are out of jobs, and are the latest casualties in the company’s efforts to trim $725 million in costs.
Akshay Rao is a marketing professor at the University of Minnesota’s Carlson School of Business. He says Best Buy indicates it will engage in more cost cutting. He said to avoid going the way of former electronics retailer Circuit City, Best Buy has to redefine what it offers to the customer.
“This is the question people at Best Buy need to ask internally, both carefully and thoughtfully about, ‘Who is their customer,’ and ‘What is it they are offering that customer?'”
Best Buy launched a new ad campaign featuring NBC comedian Amy Poehler as its spokesperson. The ad debuted during the Super Bowl as millions of TV viewers watched.
It has also initiated a price match guarantee in stores as a way to keep customers from shopping elsewhere.
Both efforts are designed to win back loyal customers at the same time company managers struggle to cut hundreds of millions of dollars in overhead costs.
“It has to be price driven because that’s where Amazon’s success has been,” said customer Jerome Reutzel.
Tuesday’s mass layoff is just the first phase of the company’s cost cutting. In its news release announcing the layoffs, Best Buy said it expects “additional reductions to come during the year.”
Best Buy closed Twin Cities stores in Edina and Brooklyn Center last June, and reported a $10 million loss in revenue for the third quarter.
Best Buy employs 8,000 in Minnesota, but has not disclosed how many workers are at its headquarters.