After Profit Declines, Best Buy Plans to Cut Workers

MINNEAPOLIS— The Best Buy Company, the consumer electronics retailer, said Tuesday that its third-quarter profit sank 77 percent as consumer spending declined.

The company also said it would offer buyout packages to about 4,000 employees at its headquarters and slash spending in a move to cut costs, news that sent the retailer’s stock soaring.

Best Buy, based in Richfield, Minn., said it would offer enhanced buyout packages to nearly all its corporate employees while cutting capital spending by 50 percent in 2009.

The chain also plans to open “significantly” fewer stores in the United States, Canada and China and said it might have to lay off workers depending on how many employees accept the buyout. The company had about 150,000 full-time, part-time and seasonal workers as of April, according to a regulatory filing.

Best Buy’s third-quarter profit was $52 million, or 13 cents a share, in the three months ending Nov. 29, compared with $228 million, or 53 cents a share, in the period last year.

Revenue climbed 16 percent, to $11.5 billion from $9.93 billion. Sales at stores open at least 14 months fell 5.3 percent during the quarter.

Shares of Best Buy rose $4.11, or 18 percent, to $27.68.

Executives called the last three months the “most challenging consumer environment” in the retailer’s history.

“We believe that there has been a dramatic and potentially long-lasting change in consumer behavior as people adjust to the new realities of the marketplace,” the chief executive, Bradbury H. Anderson, said in a statement. “We also believe that customers will continue to reward those retailers who understand their needs and desires, and offer relevant solutions at fair prices. Yet we clearly recognize that these changes require us to make significant adjustments.”