Electronics and packaged media retailer Best Buy announced that it will cut 400 positions, or about 5% of its staff, at its Richmond, Minnesota headquarters. The reductions are part of its efforts to take $725 million in costs out of its operations. This first phase represents about $150 of the $725 million cost cuts. The headquarters cuts were done “by enhancing the focus on the company’s core business, removing management layers, and eliminating operational inefficiencies.”
Best Buy has been under relentless competition from Amazon in its electronics business (see “Toys R Us, Others Complain about Walmart Price Ads”), and from digital and Amazon in its music, video, and videogame businesses. The company has been under pressure for some time (see “Best Buy Founder Resigns as Chairman”), although there are some bright spots (see “Sales Tax Matters”).
But the pressure on its entertainment business is profound, and it’s only one of a number of retailers that are struggling (see “Gamestop Closing 250 Stores”).