In case you missed it, this week Barnes and Noble laid off some 1,800 full time employees, many of which had worked for the bookseller for over a decade. Just about every store lost 3 to 7 full time people:
"On Monday morning, every single Barnes & Noble location – that’s 781 stores – told their full-time employees to pack up and leave. The eliminated positions were as follows: the head cashiers (those are the people responsible for handling the money), the receiving managers (the people responsible for bringing in product and making sure it goes where it should), the digital leads (the people responsible for solving Nook problems), the newsstand leads (the people responsible for distributing the magazines), and the bargain leads (the people responsible for keeping up the massive discount sections). A few of the larger stores were able to spare their head cashiers and their receiving managers, but not many. Just about everyone lost between 3 and 7 employees. The unofficial numbers put the total around 1,800 people."
In business, the easiest thing to cut when you run into trouble is payroll. Payroll is usually the largest of a store’s variable costs and, since most people in retail get paid by the hour, the most variable. Hence, payroll proves a very tempting target when costs start ballooning and something in the budget needs to get cut. Unfortunately, by doing so, especially by getting rid of the people who have been there the longest, and generally have the highest pay and benefits. Back in 2009, Circuit City followed a similar path, cutting payroll and moving full time employees to part time positions. That didn’t work out so well. The problem with cutting your full-time positions is that those are the people who have likely been with the company the longest and know the most about how the company works and the products or services that it sells. Getting rid of them eliminates decades of institutional memory from the organization. Then, offering to bring them back in a part-time position does not engender any positive feelings towards the organization by the said employees.
People can get almost everything that Barnes and Noble sells online more cheaply from Amazon or another online reseller. What they cannot get from Amazon or other online resellers is a pirate reading stories to their children, or someone to teach their children to play Pokemon. Retail is moving to the experiential model wherein they must provide an experience for the customer in addition to products to purchase, even if it is just something for the customer to look at while they are taking time to shop in the store. Our store does it with large amounts of out-of-print merchandise for customers to look through and appropriate videos playing on the store television. St. Louis Fantasy Shop did it some years ago with a Lord of the Rings display I still remember. Prop replicas surrounded a DVD player that continually looped the Lord of the Rings movies and a sketching area where budding artists could practice drawing comic artwork. It takes a committed and creative staff to come up with interactive displays like that to keep customers coming back. Cutting staff is a great way to eliminate them.
The opinions expressed in this column are solely those of the writer, and do not necessarily reflect the views of the editorial staff of ICv2.com.