Best Buy said it will pay pandemic-related bonuses to all hourly employees and give additional paid time off to those who get Covid-19 vaccines.
The consumer electronics retailer announced the bonuses on Tuesday, about two weeks after it confirmed it will lay off some store staff as part of a companywide reorganization. The layoffs were first reported by The Wall Street Journal. It did not say how much the bonuses will cost the company.
Best Buy’s sales have surged as consumers turned to its stores and website for laptops, video game consoles, kitchen appliances and other equipment to learn, work and entertain themselves at home during the pandemic. Its online sales nearly tripled in the third quarter. The company declined to provide an outlook for the fourth quarter, however, and cautioned it could face higher shipping costs, inventory challenges and lower-margin sales over the holidays.
The company is scheduled report its earnings before the bell on Thursday.
Best Buy had 125,000 full-time and part-time employees as of January 2020. It furloughed about 51,000 workers in mid-April, including nearly all of its part-time employees, as it decided to close stores and offer only curbside pickup. In June, it started bringing back some furloughed employees and allowed customers to visit most of its stores without an appointment.
The company gave pandemic-related appreciation pay to hourly store and supply chain employees between late March and the beginning of August. In August, it raised its minimum wage to $15 an hour.
Best Buy has not said how many employees will lose their jobs because of its reorganization. In a prepared statement, the company said that the global health crisis has permanently shifted more sales online — and that will change employees’ roles, too.
“Our workforce will need to evolve to meet the evolving needs of customers while providing more flexible opportunities for our people,” it said in a statement.
A company spokesperson said workers who are losing their jobs will still receive bonuses.
Full-time hourly workers will get $500 and part-time hourly workers will get $200, the company said. It will not require workers to get Covid shots, but will offer an incentive for those who do: Eight hours of paid time off for full-time workers and four hours of paid time off for part-time workers. If they feel ill after getting the vaccine, Best Buy said it will give them additional sick time of the same amount, based on their full- or part-time status.
Other retailers including Target, Dollar General and Kroger have offered perks, too, such as extra pay or free transportation.
The pandemic has lifted sales at grocers, big-box stores and home improvement chains. Many of those companies have paid bonuses or increased wages in recent quarters. Target accelerated plans to raise its starting wage to $15 an hour this summer and gave a bonus after its holiday season. Walmart recently announced it would give a raise to 425,000 workers in digital or stocking roles.
Retailers with strong sales during the pandemic have faced heightened scrutiny. Their profits have soared as their workers have taken on additional risks, and in some cases gotten sick or died from Covid-19 after stocking shelves or checking out customers. The push for higher pay has gained traction, too, as more states raise their minimum wage and President Joe Biden advocates for a $15 federal minimum wage.
Higher pay and pandemic-related paid leave benefits have weighed on companies’ profits, too. Walmart, for example, said it spent $1.1 billion on Covid-related expenses in the fourth quarter alone.
Source: Business - cnbc.com
