This move drew immediate widespread public criticism for its lack of sensitivity. Instead of issuing severance payments immediately, the company withheld them to ensure that company-issued BlackBerrys, laptops and cellphones were returned. Unfortunately your position is one that has been eliminated.' Four hundred and three workers were given 30 minutes to collect their personal effects, say their goodbyes to co-workers and then attend a meeting with their senior supervisors. On Tuesday, August 29, the affected workers received an e-mail: 'The work force reduction notification is currently in progress. On August 10, 2006, RadioShack announced plans to eliminate a fifth of its company headquarters workforce to reduce overhead expense, improving its long-term competitive position while supporting a significantly smaller number of stores. ĭespite these actions, stock prices plummeted within what was otherwise a booming market. In markets too small to support a company-owned Radio Shack store, the chain relied on independent dealers who carried the products as a sideline. As an incentive for them to work long hours and remain profitable, store managers were required to take an ownership stake in their stores. Customer data from the former RadioShack mail-order business determined where Tandy would locate new stores. Private-label brands from lower-cost manufacturers displaced name brands to raise Radio Shack profit margins non-electronic lines from go-carts to musical instruments were abandoned entirely. The number of items carried was cut from 40,000 to 2,500, as Tandy sought to 'identify the 20% that represents 80% of the sales' and replace Radio Shack's handful of large stores with many 'little holes in the wall', large numbers of rented locations which were easier to close and re-open elsewhere if one location didn't work out.
Tandy closed Radio Shack's unprofitable mail-order business, ended credit purchases and eliminated many top management positions, keeping the salespeople, merchandisers and advertisers. It created small stores that were staffed by people who knew electronics, and sold mainly private brands. Tandy's strategy was to appeal to hobbyists.
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