Circuit City AnalysisProblemAt the start of fiscal 2007, Circuit City (CC) announced that it would lay off more than 3,400 of its highest paid employees (Business Week, 2008). The goal of this staff reduction was to reduce internal costs by eliminating a significant percentage of CC's senior and middle management. The main problem with this reduction is that CC lost most of its skilled employees and customer satisfaction dropped. CC needed to make changes to reduce costs, but it failed to integrate staffing practices into strategy (Dreher & Dougherty, 2001). The result of this and numerous other failures at the senior management level is that CC shares have fallen 28% over the past year. StrategyThe strategy that CC chose to use seemed simple enough. Firing employees and rehiring them at less than “market rate” (Business Week, 2008). This would undoubtedly save the organization a lot of money and CEO Philip Schoonover thought it was a great solution. The problem was that CC didn't realize it was laying off its key customer service representatives. Employees who were in contact with customers on a daily basis were laid off. Results CC's firing of thousands of employees saved money on wages, but lost many more sales while increasing customer dissatisfaction . CC failed to integrate staff practices with strategy. These practices require an organization to explicitly characterize its business strategy and then make a judgment about whether existing staffing practices appear to be aligned with the strategic direction. CC laid off staff but failed to see the effects these reductions would have on staff and their ability to meet customer needs. The result of this move was that CC shares fell to $4.80 during trading on December 21, 2007, hitting a new 52-week low of $4.76 earlier in the session (Business Week, 2008) . AT&T: Anabel GarciaIssueAT&T, BellSouth and Cingular are in the final. fusion stages. Companies view a merger as combining the largest data infrastructure with the largest local data provider in order to increase service capabilities, increase profits and become a global leader. These companies will operate under the AT&T name to take advantage of the oldest and best-known phone brand. Some analysts believe that the Cingular brand is aimed more at today's "crowd" of technology users and AT&T recognizes this fact. These companies want to reduce redundancies in suppliers, employee tasks and marketing; this would result in the layoff of more than 13,000 employees.