Circuit City files for bankruptcy; axes 700 more jobs

“Circuit City Stores Inc., the nation’s second-biggest electronics retailer, filed for bankruptcy protection on Monday but plans to stay open for business as the busy holiday shopping season approaches,” Vinnee Tong and Michael Felberbaum report for The Associated Press.

“It filed under Chapter 11 of the bankruptcy code, which will allow it to hold off creditors and continue operations while it develops a reorganization plan,” Tong and Felberbaum report.

“Circuit City also said it would cut 700 more jobs, after announcing a week ago that it would close 20 percent of its stores and lay off thousands of workers,” Tong and Felberbaum report.

“The company’s biggest creditors are its vendors: Hewlett-Packard has a $118.8 million claim followed by Samsung ($115.9 million), Sony ($60 million), Zenith ($41.2 million), Toshiba ($17.9 million) and others,” Tong and Felberbaum report. “Smaller creditors include GPS navigation system maker Garmin, Nikon, Lenovo, Eastman Kodak and Mitsubishi.”

Tong and Felberbaum, “Circuit City Stores Inc. announced a week ago it planned to close 155 of its more than 700 U.S. stores by Dec. 31. The stores are spread throughout 28 states, including multiple locations in areas like Phoenix and Atlanta. It is laying off about 17 percent of its domestic work force, which could affect up to 7,300 people.”

Full article here.

20 Comments

  1. Yes, it is sad. It’s not a good time for anyone to lose their job… especially into the holiday season.

    I went into a Circuit City yesterday and they advertised 10%-20% off storewide. Unfortunately, they were fake mark-downs. They’ll fool some people, but not the savvy tech shopper. The prices were marked down from retail… not street price.

    They were very nice and courteous though.

  2. Hmmm.. why does the US seem obsessed with the Free Market, but when people lose jobs, they mourn, and in the worst cases, fight against the market to keep people employed?

    There are alot of people that voted against this lunacy (by electing Obama). Lets bury this bs, shall we?

    If you want to compete against China and India, expect to lose out on the bottom end of the pay grade. Retail store staff are VERY expendable in the eyes of Management (and any job security they may have had was kinda cut off at the knees with commission pay packages etc).

    Got a job in Retail and you lost your job cuz of crap like this? Great. You learned sales. Now you can work at ANY RETAIL STORE IN YOUR CITY.

    Don’t feel sorry for the line workers, they can find jobs easily.

    The guy who was VP of Marketing. How’s he gonna get rehired with this on his resume?

  3. mike… My comment had nothing to do with politics or global economics. From the human perspective it’s sad when anyone loses their job. Not too long ago I had to sit in a server room and shut down our WAN while hundreds of people were getting fired (they didn’t want any disgruntled employees to email company secrets out). I turned it on later that evening when everyone was out of the building.

    I keep thinking about the look of despair on people’s faces.

    Oh yes…and I voted Obama for the sake of change for my family. I’ll take any tax hit. McCain is too old and we would be worse off if Palin was made President. Rush is wrong!

  4. I feel badly for all the people that are loosing their jobs. I can’t wait until January 20th.

    Also, I don’t care which computers they sold! They sold tons of other electronics, and the fact that a giant retailer like circuit city has collapsed is just a sign that many many more businesses are about to follow. How any American can be happy about that leaves be bewildered.

  5. @this is terrible

    “I feel badly for all the people that are loosing their jobs. I can’t wait until January 20th.”

    Actually, and before we proceed here: You feel “bad,” not “badly.” The latter means your fingers are frostbitten. Next, these people are not “loosing” their jobs; they are “losing” them.

    Now, and that said . . . If you think some kind of magic dust is going to settle over America and the world on January 20, 2009, you really need to RUN, not walk, to your nearest psychotherapist. This mess started with the Community Reinvestment Act of 1977 (initiated by James Earl Carter, perpetuated by William Jefferson Blythe Clinton, and George W. Bush) and will NOT go away in the first 100 Blessed Days of The Reign of His Excellency Obama. This downturn (depression?) is undeniably bipartisan, sir or madam, and believing otherwise will only lengthen the problem.

    And that does not leave “be” (me) bewildered.

  6. All you free marketeers- this is what is supposed to happen to companies that don’t get the job done. CC has been treading water for very long time now and deserves to sink.

    We need to let GM fail instead of bailing them out. Nothing will send a signal to the also-rans of US industry like letting this corporate welfare queen sink. GM has been the recipient of more tax-breaks, direct & indirect subsidy, protective tariffs and such than any other manufacturing company in this country.

    The only people I feel sorry for are the employees that have tried to do a good job. To the lame management- it sucks to be you today.

  7. @Tweeker B: “street prices” are not really a sustainable business model for anyone, thanks to the wonders of “internet fantasy” pricing (aka “bait and switch”) or simply VERY low margin resellers. Typical real pricing in retail is called “minimum ad price”, or what the lowest price you can openly advertise, without having your dealer agreement (and ad co-op) teminated. “MSRP” is a fantasy high number that has almost gone the way of tube tvs, in electronics retail.

    No margin means no real jobs and no support for the consumers; not everyone is tech saavy like (some of) the posters on this forum.

    As someone who works in the business (digital cameras/video gear), I’m not said to see an annoying competitor go away. I AM sick of people who assume there’s big money/margins in DSLRs (or $199 P&S;) for that matter.

    If you enjoy the benefits of a consumer economy (which is huge percentage of the U.S. job market), remember to shop at your LOCALLY owned hardware store, camera shop, etc. whenever possible; those folks make YOUR job possible, too.

  8. Radian… This isn’t english class. Who cares how people type in this forum? *(appaarently you do.)

    The message that “this is terrible” sent out was clear.

    Radian: “Now, and that said . . . “

    me: I believe the phrase is “Now, with that said…”

    Radian: “in the first 100 Blessed Days of The Reign of His Excellency Obama. “

    me: There’s a comma after the word Excellency.

    You should really take an english class you uneducated and grammar slob!

  9. Mormons are to blame for Prop 8 passing in California.

    That’s okay…because I’ll have Prop 8 passing in exchagne for an Obama administration any day of the week.

    President “would be” Palin thought Africa was a country!!!

    I say would be because McCain is too damn old. People RETIRE at his age…NOT become President! Gimme a break here!

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