Circuit City lays off 3,500

RICHMOND, Va., March 28 (UPI) -- No. 3 U.S. consumer-electronics retailer Circuit City Stores Inc. said Wednesday it laid off 3,400 store workers and 130 corporate jobs to cut costs.

The laid-off store employees, earning "well above the market-based salary range for their role," are to be replaced by lower-paid workers, the company said.

"We are taking a number of aggressive actions to improve our cost and expense structure, which will better position us for improved and sustainable returns in today's marketplace," Circuit City Chief Executive Officer Philip Schoonover said.

Separately, the Richmond, Va., company said it would outsource its information-technology infrastructure operations to IBM Corp. in a move it said would likely cut IT expenses by more than 16 percent.

About 50 Circuit City IT workers will move to IBM and remain on the Circuit City contract. Eighty other corporate positions will be cut.

The company said this winter it would cut costs and make management changes to improve sales and reduce expenses.

Circuit City is the third-largest consumer-electronics retailer behind Best Buy Co. and Wal-Mart Stores Inc.