Newsletter #19 (2/24/2025)
Best Buy's turnover problem, Delta's scary crash is a PR lesson, AI is still not coming for your job (and least yet)
Best Buy says they’ll pay for their employees to get degrees.
This is an interesting path to what they claim is part of a strategy to reduce turnover, which also includes cross-training for scheduling flexibility.
What I did not see addressed in their announcement on fighting their turnover issue is pay.
In 2024, Best Buy had at least two publicly known rounds of substantial layoffs, one in April and another in June. After ramping up hiring during the COVID era as a result of a pandemic-influenced Cinderella story of a turnaround, Best Buy has yet again found itself struggling to compete in 2024 and 2025, and its stock price reflects that: not growing, not falling, just stuck.
There are a number of resources to understand Best Buy’s pay structure like Reddit, Payscale, Indeed, and GlassDoor, though the caveat would be they are generally anonymous sources from purported employees. Using information from those sites in combination with a 2020 corporate announcement from Best Buy itself, we can reasonably assume the average pay for Best Buy employees with limited skillsets would be $15-18 per hour, depending on the market. While in-line with what Walmart offers, the sheer size of Walmart can limit a comparable on career growth opportunities between the two.
One particular issue Best Buy faces is their retail locations are too large for the type of business they are trying to run now in 2025. The average Best Buy location is about 36,000 square feet. They likely need to be trimmed down to around 20,000 square feetThey own some locations and lease others. When it comes to the lease agreements for these too-large locations, their CFO has said it best: “We will continue to close existing traditional stores during our rigorous review of stores as their leases come up for renewal.”
Regardless of their overall cost structure, the level of pay offered by Best Buy may likely still lead to substantial levels of churn (turnover) for the retailer in the long-term. I applaud them for trying something to drive down their turnover. The reality is they are stuck between a rock and a hard place: their cost structure is just too heavy to afford higher wages, but they cannot afford to not address their wages when retail competition for skilled labor is fierce.
Walmart’s 2025 revenue forecast was curious.
Walmart’s announcement last week that forecast sales and profit for 2025 below Wall Street estimates raised some eyebrows in the financial world.
"Walmart's lower-than-expected guidance is a warning that U.S. consumer spending is slowing, said Brian Mulberry, client portfolio manager at Zacks Investment Management, who also said if “Walmart's soft guidance is followed by a decline in jobs,” it may indicate economic growth is slowing.
This is something to pay close attention to in the quarter ahead.
That scary Delta Airlines crash in Canada is resulting in an interesting PR fix.
Delta Airlines came right out of the gate and offered $30,000 to every passenger on the flight in renumeration for being on the jet when that scary situation happened.
It is still amazing to me that anyone survived that crash, let alone literally everyone.
For Delta, it has caught flak from both sides, so to speak, for how they have handled the crisis following the crash. For lack of better description, putting this offer out there so quickly was meant to get ahead of a serious PR calamity.
While it does not matter the end amount the victims receive – and let’s call it what it is, they are victims – Delta was fighting a losing battle from the minute the situation happened. Whether it is $30,000 or $3,000,000 each passenger receives, there’s no amount of money that the company could offer that replaces the feelings they each had in the seconds the airplane hit the ground and rolled over. Apologizing, offering compensation and correcting any wrongs which led up to the event are all Delta can do here. It’s a tough lesson, but one they need to find a way to put quickly behind them.
DeepSeek’s AI platform may have been the needed catalyst to slow down the AI hype train.
Following the Wall Street tech firm financial wipeout of $1 trillion in January due to the realization of what DeepSeek was, I think it is becoming more clear to everyone that the AI hype bubble is slowing letting the air out.
You may or may not have seen this nugget of info from Anthropic in HR Dive recently. This data provides additional support that AI is not quite what everyone was making it out to be (again, yet).
Specifically, “workers are using artificial intelligence slightly more for augmentation (57%) than for automation (43%), an analysis of more than 4 million AI user prompts by AI safety and research company Anthropic found.” A little concerning to me is the data indicates the number one skill workers are using AI for is critical thinking:
The findings by Anthropic “mirror an assessment made by Indeed last fall stating that while generative AI could assist in various tasks, there were no skills for which it was “very likely” to replace a human worker.”
So, while the AI hype train may indeed still push down the tracks, the hype versus reality discussion is hopefully becoming more level-headed than it has been.
Ford is slashing stock option grants to managers to boost productivity.
Or so they say. Ford, which is currently obsessed with cutting costs due to (in part) the threat of tariffs on the auto industry, said “only half of 3,300 middle managers will get stock award bonuses that are normally granted in March.”
I get the need to slash costs, and let’s face it, Ford has to find ways to buoy its profitability (which is razor thin to begin with). But, I find it interesting when companies say they want to boost profitability, then cut pay or perks, and expect employees, managers and executives to respond with, “you bet, I’ll work harder now.” Good luck to Ford with this tactic.
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© February 2025, Brandon Caldwell. All rights reserved. Hyperlinks are used frequently for proper credit to source material on respective websites, news articles, social media or other sources. Images are used with and in credit to rights reserved to their respective owner(s). While it can be a useful tool, no ChatGPT or other generative AI was used in the production of this newsletter. Opinions are mine and do not reflect the opinion or policy of others including employers past or present.