Best Buy confirmed Tuesday that it will cut 400 jobs at its Richfield, Minn., headquarters. The job cuts are part of a restructuring plan called "Renew Blue," and the company expects to save about $150 million via the reduction.
A press release from the company said the initial reduction in administrative costs has been achieved by "enhancing the focus on the company's core business, removing management layers and eliminating operational inefficiencies." Additional cuts are expected later this year.
Tuesday's announcement does not include any store closures and the job cuts do not affect any "Blue Shirt" sales associates.
This round of job cuts and company restructuring is all part of a larger $725 million cost-cutting effort announced by CEO Hubert Joly.
"Best Buy remains focused on delivering its customer promise to provide: a low price guarantee, the latest and greatest devices and services in one place, impartial and knowledgeable advice, the ability for customers to shop when and where they want and have support for the life of the product," the company said in a statement.
It's been well known that change has been on the horizon for the company, but it's difficult to tell what's in store in the days to come. Even so, many say the layoffs were not a surprise.
"In many ways, they need to cut -- but they need to get back to their core business," said Anne McCarthy, dean of the business school at Hamline University.
Although she thinks Joly is on the right track, she says the company has a tough road ahead.
"The other thing they need to think about is their long-term strategy," McCarthy said. "Cuts will only get you so far."
According to McCarthy, the retail giant will also need to evaluate what it wants in terms of its stores -- how close they are to one another, whether they have a place in destination locations like the Mall of America, or whether remote stores should be closed.
For the time being, the company does not plan to close any stores.
Currently, Best Buy employees about 8,000 in the state, but there's an unknown amount of vacant space at the headquarters campus. U.S. Bank has confirmed they will move into 84,000 square feet of the building in June.
The company's earnings report, which will reflect holiday sales, is expected to be released at the end of the week, and Best Buy's founder, Richard Schulze, is expected to make a bid for the company by Thursday.
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