Sunday, December 30, 2007

Free Market Karma

For those of you who rolled their eyes at my left-leaning blog post "Burning in Liberal Hell" about my angst over buying my digital camera at Circuit City, I thought I'd post this in follow up.

As a refresher, in a bonehead (a/k/a "cost cutting") move, Circuit City laid off all sales associates paid 51 cents or more per hour above an "established pay range" - essentially firing 3,400 of its top performers in one fell swoop. Over the next eight months Circuit City's share price dropped by almost 70%.

This earned Circuit City the number 70 spot on Fortune magazine's 101 Dumbest Moments in Business. (Call me crazy, but I'm pretty sure that Fortune isn't part of what my father would consider the liberal elite media.)

Perhaps the free market system really does work. I'd say that Circuit City got what was coming to them. It seems intuitive but I guess someone should have spelled it out to Circuit City's executives - one doesn't fire top performing employees to save money. Duh.

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