What Really Happened to Circuit City? The Firing That Doomed Them
In 2007 Circuit City fired 3,400 top salespeople; service crashed, shoppers fled to Best Buy, and bankruptcy hit 18 months later.
“What Really Happened to Circuit City? The Firing That Doomed Them” The Mystery Hook:
Circuit City was BEATING Best Buy in the early 2000s Then they made one catastrophic decision 18 months later, they were bankrupt
The Intrigue:
March 2007: Circuit City fires 3,400 of their highest-paid (most experienced) salespeople Replaced them with minimum-wage employees who knew nothing Customer service tanked overnight The CEO said it was to “reduce costs” (they saved $110 million) Cost them EVERYTHING
Mystery Elements:
The smoking gun: Internal emails show executives KNEW this was risky The domino effect: Loss of expertise → worse service → customers fled to Best Buy The arrogance: Management thought salespeople were replaceable
Other bad decisions:
Launched DIVX (their own DVD format) instead of supporting DVD—customers hated it Refused to match online prices Terrible website while Best Buy invested heavily online
Reveal: They committed suicide by firing their best people to save pennies while losing dollars.