More on Circuit City

Julie Devoll over at Harvard Business School Press mentioned that Paul Michelman also posted on Circuit City on their new blog, Conversation Starter. Paul wondered how the morale of the company's remaining employees would be impacted and how its managers could deal with that impact. That's a good question, but if I was a manager there, I don't know that I would care. I'd figure I was next and start looking for a job with a future.

By the way, here's what one of the fired Circuit City employees commented in response to Paul's post:

I was employed with Circuit City for almost 2 years, and I was laid off due to "making too much for my position." I would have taken a pay cut, no problem, but no, they didn't offer that. They gave me 2 weeks severance pay and off to the unemployment office I go. They did say I was able to come back (if re-hirable) in 11 weeks and get my job back but at a lower range of pay...
- Posted by Sandy K. April 2, 2007 09:38

Could the money Circuit City saves on the wages of people like Sandy really offset the costs of severance pay, unemployment benefits, new employee acquisition, training, and salaries, the presumable drops in morale and productivity, etc.?