Richmond (VA) - The #2 electronics retailer, Circuit City, has initiated one of its biggest layoffs, cutting thousands of its highest paid hourly employees.

The employees, which include managers and floor workers with the most longevity, will be replaced with lower wage newcomers. Alternatively, the affected employees can apply for the decreased pay.

Fired employees will be given a severance check. The penny pinching move comes after announcements that the chain plans to shut down nearly 600 stores and permanently axe 400 jobs.

According to a Bloomber report, average pay for a Circuit City employee is around $10 - $11 per hour. The company’s CEO Philip Schoonover took in about $8.52 million during the 2006 fiscal year.