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  • Essay / Circuit City Case Study - 720

    Seitel said Circuit City management responded to the CFO's departure by offering an additional cash inflow of $250,000 on top of its $1 million per year (p. 218). Management was more concerned about the loss of a high-ranking employee, but did nothing to help preserve the jobs of 3,400 salespeople. Management should have been advised to treat all employees with equality and dignity, regardless of their position. Interestingly, “the layoffs…are expected to reduce the electronics retailer's expenses by $110 million in fiscal 2008” (Mui, 2007). By comparison, Circuit City's CFO salary was $1 million. The salary of an executive was almost equal to the total expenses reduced by laying off employees. This showed that lower level employees are useless and not as valuable to the company as a higher level employee.