Best Buy, the world’s largest consumer electronics retailer, slashed 400 jobs at its head office as Chief Executive Officer Hubert Joly tries to reduce costs. The job cuts and other actions will result to the decrease of around $150 million in selling, general and administrative costs. The company didn’t say how many people work at its headquarters in Richfield, Minnesota. It employs around 8,000 in Minnesota and more than 160,000 across the globe.
Joly became the CEO of Best Buy in September. He announced last year that he is planning to decrease costs by as much as $750 million as the retailer compete with Wal-Mart Stores and Amazon.com. The job cuts come three days before Best Buy releases its fiscal fourth quarter results. Investors want to know whether holiday discounts and its policy matching competitors’ prices affect its bottom line.
Best Buy dropped 3.2 percent to $16.46 at the close in New York. The shares went up 39 percent in 2013 after falling 49 percent in the previous year. The cost reduction plan comes two days before the deadline for founder and former Chairman Richard Schulze to give an offer for the company.
Best Buy said that it would release its earnings report on March 1, from the initial plan of February 28. This will give Schulze time to make a bid. Schulze planned a buyout of $24 to $26 per share in August, two months after he resigned. He left the company after an investigation found he didn’t inform directors about claims that former Chief Executive Officer Brian Dunn had an inappropriate relationship with a female employee.
Schulze has been working with three private equity firms to arrange financing for his buyout plan. In December, Best Buy said that it would extend the period for him to provide a bid until February 28.