Best Buy Offers Voluntary Severance Packages To Employees

Best Buy offered voluntary severance packages to all of its 4,000 corporate employees on Tuesday as the largest consumer electronics store in the U.S. announced that its 3rd quarter profit slid 77%. The reduction in third-quarter earnings was due in large part to a non-operating impairment charge of $111 million ($93 million net of tax, or $0.22 per diluted share), related to a significant and sustained decline in the market price of the companys nearly 3 percent stake in the common shares outstanding of The Carphone Warehouse Group PLC (CPW).

"We believe that the environment for consumer spending is likely to get worse before it gets better," said Chief Executive Brad Anderson. "In fact, we can foresee a period in which consumers may significantly shift their spending behaviors, which could have a dramatic impact on retailing." These results coming right after Circuit City Stores filed for Chapter 11 bankruptcy protection because of slow sales and mounting debt.