April 15 (Reuters) - Electronics retailer Best Buy Co Inc said on Wednesday it would furlough about 51,000 hourly U.S. store employees but retain a vast majority of its full-time store and field workers to cater to a surge in demand for work-from-home equipment due to the coronavirus lockdowns.
The retailer, which has switched to a curbside delivery model amid store closures, said that starting next week, some corporate employees would also participate in voluntary reduced work weeks and voluntary furloughs, while its top management and board would take a pay cut.
The company’s sales during the quarter, before switching to the new service model late in March, grew about 4%, ahead of its own expectations, Best Buy said, adding that domestic online sales were up about 250% from a year earlier.
Sales grew about 25% during an 8-day period ended March 20, a day before the company announced its decision to switch to a curbside model, as people shopped for work-from-home equipment, gaming-related products as well as products needed to freeze food, the company said.
However, the shift in its service model has led to a drop in customer traffic, with sales dropping 30% from March 21 through April 11, Best Buy said.
The company has already withdrawn all financial forecasts for fiscal 2021 and drawn down the full amount of its $1.25 billion revolving credit facility.
Best Buy had nearly 125,000 full-time, part-time and seasonal employees in the U.S., Canada and Mexico, at the end of fiscal 2020, according to an annual filing.
“The situation remains very fluid and there is still a great deal of uncertainty, particularly as it relates to depth and duration of store closures and consumer confidence over time,” Chief Executive Officer Corie Barry said.
Shares of the company were down about 4% in early trading on Wednesday.
Reporting by Aishwarya Venugopal in Bengaluru; Editing by Vinay Dwivedi