Companies that do what you speak up, replacing tenured employees with un-experienced employees to save money always loose. Most companies like Circuit City make these kind of decisions because their company is doing so poorly they take a drastic course of laying people off. Circuit City has struggled to stay in business I beleive for some time. In the case of Home Depot, they probably cut salaries too much, but several years ago they were paying their employees alot more money per hour than was Lowe's. Hourly employees really made a great salary compared to most others in the same industry. The fact that they may have cut out their specialist, plumbing, building, electrical, and etc by lowering salaries probably did hurt Home Depot, but what has really hurt Depot is the competition from Lowe's. HD was run by the seat of its pants in the old days in my opinion with every store manager doing his own thing. As competition moved in the cost of doing this soon caused problems. The company that can deliver the products at the right price and at the right quanities at the right time with the least amount of cost to the company always wins in the end. Then superior training, better merchandising and better store standards, thrown in with an adequate salary and advancement opportunity gives the edge to Lowes, or any other company competing in retail today. The press and Wall Street likes to talk only about salary, but in the scheme of things it is a tiny part, however, happy employees will always give better service to customers. Home Depot has plenty of operational problems, merchandising problems, and staffing problems.

Corporations, are looking to "cost controls" when they cannot generate top line, ie. sales. The biggest factor in any retailing operation is labor and they can add hours when sales goes up, and take away hours when their not making Wall Street
projections. When, they face low cost wage competition, then the Home Depot's and Lowe's of
the World, reduce their operating costs by lowering
their average wage, ie. establishing maximums, for
there employees and getting rid of "high paid"
workers both in management and hourly, since they can be easily replaced, with hundreds of applicants willing to work for lower wages. There is only one outstanding retail company, that has not gone to this, and that company is Costco, an
outstanding well managed company in America today.
Ray
haveittodayray

The problem is a lack of brand loyalty at the retail level. Case in point. I went shopping for a laptop for my daughter this past Christmas. I checked all the ads, Costco, Best Buy, and Circuit City. Then I went to my guys at CompUSA and talked it over with their young but very knowledgable sales people. I finally settled on an HP. I then went over to Circuit City and bought it for $50.00 less than offered anywhere else. Of course I had to show the Circuit City kids where the machine was and what it looked like. Bottom line - my CompUSA is closing in a pullback and Circuit City is still hanging on.