TORONTO-- Best Buy Co.'s Canadian unit will lay off 950
full-time employees, or about 5.6% of its workforce, as it realigns
its operations to better compete in a tough retail environment.
The electronics retailer said the cuts are aimed at reducing
some management layers and consolidating sales departments, and
will affect workers at both its Best Buy Canada and Future Shop
banners.
The move comes soon after the U.S. parent posted
weaker-than-expected holiday sales on Jan. 16, causing its stock to
tumble. Observers said the weak holiday results were a sign that
its discounting strategy, aimed at squaring off against competitors
such as Wal-Mart Stores Inc., had failed to gain traction with
consumers.
Best Buy doesn't break out sales results for its Canadian
unit.
"We have been focusing on simplifying our store structure and
increasing efficiencies to better align with the changing needs of
our customers," said Best Buy Canada President Ron Wilson in a
statement.
Mr. Wilson pointed to a silver lining for the retailer, noting
that online sales have risen by more than 50% in the past year and
new services such as in-store product pickup are doing well.
The layoff announcement comes just one day after Sears Canada
Inc. said it was cutting 624 jobs. The department store retailer,
which is controlled by Sears Holdings Corp., also shed many jobs
last year as it undertook a turnaround effort.
The arrival of U.S. retailers including discounting giant Target
Corp. has led to steep discounting and stiff competition in the
Canadian retail sector.
Write to David George-Cosh at david.george-cosh@wsj.com
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