This is either a pretty bad move by Circuit City, or it signals something wrong with their finances. Or both. If a company has a competent workforce in place already, what's the point in replacing them with new employees who will need significant training time before they can adequately take over from the previous associates?
And why should the current employees have to suffer for Circuit City's mistake anyway, if they're just now realizing that they've been paying "well above the market-based salary range" for all this time? Is that really a mistake? Employees who have shown commitment deserve to be compensated for their loyalty. It's the associates - and not the execs who hardly ever enter a Circuit City store - who make or break the company. Not doing right by them like this is wrong on so many levels.
Chalk it up as another example of the deterioration of American industry, folks.