Coronavirus News: Best Buy To Furlough 51,000 Workers, Reduce Executive Pay

Best Buy (BBY) has announced that it is furloughing about 51,000 hourly workers, including nearly all its part-time employees, amid the coronavirus pandemic. The furloughs are effective Sunday.

The company said it is retaining about 82% of its full-time store and field workers, including the majority of its In-Home Advisors and Geek Squad Agents. Best Buy will continue to pay healthcare benefits for the furloughed workers for a minimum of three months at no charge to employees.

In addition, some Best Buy corporate employees will voluntarily reduce their work weeks, receiving reduced pay, while others will take voluntary furloughs, also effective Sunday.

CEO Corie Barry will also reduce her base salary by 50%, while the members of the Board of Directors will reduce their cash retainer fees by 50% through at least Sept. 1. Company executives reporting directly to Barry will reduce their base salary by 20% through at least Sept. 1 as well.

The company is also suspending its 401k company matching program and decreasing its capital spending to focus on mandatory maintenance and areas that will bring the most strategic value. The company is also reducing its promotional marketing and extending payment terms with key merchandising vendors.

Best Buy, which has converted to a curbside pickup business model during the COVID-19 crisis, saw its company sales decline 5% on a year-over-year basis over a nine-week period, ending April 4. Durign this time, the company saw a surge in demand for products that provided work or learn from home capabilities as well as products for freezing food.

Best Buy previously said it would close all its stores to in-store customer traffic through April 11. The tech retailer also suspended all in-home delivery, installation, and repair services.

“The situation remains very fluid and there is still a great deal of uncertainty, particularly as it relates to depth and duration of store closures and consumer confidence over time,” Barry said in a statement.

“We are taking the steps necessary to resume providing our customers in-home services in the near future, keeping in mind our overriding priority on the safety of our employees and customers. We are also preparing to re-open stores to customers as soon as it is safe to do so, with timing likely to vary at state and local levels.

“In the meantime, as you would expect, we are focused on making the difficult decisions necessary to ensure that at the end of this crisis Best Buy remains a strong, vibrant company,” she added.

Shares of Best Buy stock were down 5.46% as of 10:29 a.m. EDT on Wednesday.