Cutting costs sometimes cuts customers
Found this thanks to Daring Fireball [df].
The issue of well trained, and thus better paid, professional sales people versus paying people minimum wage is one I'm quite familiar with. It's kind of heart warming to see that at least one company has been bitten by the dumbing down of sales.
This is taken from Beat the Press Archive [btpa]:
The basic story is that last March, the wise men who run Circuit City came up with the brilliant idea of laying off their more senior salespeople, who get $14-$15 an hour, and replacing them with new hires who get around $9 an hour. It turns out that this move was not very good for business. One of the reasons that people go to a store like Circuit City, rather than buying things on the Internet, is that they want to be able to talk to a knowledgeable salesperson. Since Circuit City had laid off their knowledgeable salespeople, there was little reason to shop there.
Apparently Circuit City came to this same conclusion earlier this fall and tried to hire back some of the people it had dumped. In any case, things have not gone well for the bottom line. The company is now losing money and its share price is down more than 75 percent from its value earlier this year.