Electronics retail giant Best Buy Canada is cutting 950 jobs at its namesake and Future Shop stores as it streamlines its business to take on tougher competition.
“We have been focusing on simplifying our store structure and increasing efficiencies to better align with the changing needs of our customers,” said Ron Wilson, president of Best Buy Canada.
The restructuring entails consolidating sales departments and reducing management layers in Future Shop and Best Buy stores.
The announcement Thursday comes a day after Sears Canada Inc. said it is cutting 624 employees on top of 1,628 it eliminated earlier this month.
The job cuts underscore the increasingly competitive retail landscape as U.S. discount giants Wal-Mart Stores Inc. and Target Corp. expand in this country, other new foreign merchants arrive and online players steal away business from incumbents, leaving them scrambling to keep up.
Best Buy’s U.S. parent has had its own problems south of the border, forcing it to close stores, let go employees, cut prices and re-focus its business on key technology brands.
This month, it reported disappointing holiday sales after having slashed prices to gain sales, which sliced profit margins.
Best Buy’s same-store sales, a key measure of revenue at locations open for at least 12 months, fell by 0.9 per cent during the crucial holiday period. And margins were worse than expected.
The Canadian division’s same-store sales saw a “slight increase,” the company said.
Best Buy Canada has been fighting back, carrying out its own transformation plan under new leader Mr. Wilson, who took over the top job last year. He opened 176 “stores-within-a-store” concepts, working with high-profile suppliers such as Microsoft and Samsung to give their fast-growing products more prominent space in the big-box Best Buy stores.
Best Buy Canada has also launched six new Best Buy Mobile smaller stores and plans two new Future Shop outlets, the company said on Thursday. While it closed stores last year, the company said the latest job cuts do not entail closing more stores.
The retailer enjoyed more than 50-per-cent sales growth in its e-commerce business in the past year while its new in-store “reserve and pick-up” service more than doubled in that period, Mr. Wilson said.
“These changes in the way our customers are interacting with us have led us to look at how to best deploy our staff to meet those evolving needs.”
The company has also expanded its online offerings, introducing new categories and products including baby goods.