Despite seeing a surge in online sales during the pandemic, Best Buy said it laid off 5,000 employees in February and will be shuttering additional locations in 2021, according to a CNN report on Friday (Feb. 26).
Corie Barry, chief executive officer of Best Buy, said on a call with analysts Thursday that the electronics retailer is adjusting its mix of full- and part-time employees. Most of the employees laid off were full-time. She said more part-time roles were needed for flexibility. Best Buy has around 102,000 employees and 1,000 stores.
Best Buy is anticipating that 40 percent of its sales in 2021 will be online, up from 19 percent in 2019. The retailer said staffing will be revamped to accommodate the changes in how people shop. The company said it will also start utilizing more of its physical retail space for the fulfillment of home delivery orders and is planning to test out new store layouts.
The company has closed about 40 retail locations since 2018 and has 450 store leases coming up for renewal in the next three years, Barry said, per CNN. She added that “there will be higher thresholds on renewing leases as we evaluate the role each store plays.”
“As part of the review process, we have closed approximately 20 large-format locations each of the past two years and expect to close a higher number this year,” Barry said, per USA Today. “We have also been reducing the length of our average lease term, which will continue to provide us flexibility.”
Barry also said the company is revamping its business model to better meet the changing needs of its customers. “The sudden and lasting shift customers have made to shopping more regularly and seamlessly across all of our channels has forced us to look at how we get our work done,” she said.
Best Buy said earlier this week that it was going to explore new store formats due to the shift to online shopping. The company is planning to test the new layouts in one or two markets, which reduces square footage for shoppers to around 15,000 square feet instead of the usual 27,000.