DATE: ACTION: INFO: FROM: SUBJECT:

October 18, 2012 Julian Day, CEO CFO, Vice President Operations, Vice President HR Group - V2, Head Corporate Communications CRITICAL ISSUES AND IMPLICATIONS ON THE PERFORMANCE OF THE COMPANY

This memo highlights the critical issues of various happenings in the company and their implications on the staff and overall performance of the company and the actions recommended. Background RadioShack Corporation is a leading consumer electronics goods and services retailer, which now stands third in the U.S market behind stores like Best Buy and Circuit City. The electronics goods industry is highly competitive in nature and there is immense pressure on the management to sustain its leading position in the market. Over the past years the company has seen several changes in top management positions which have apparently affected shareholders belief in management stability.

Discussion The effects of frequent management changes and increasing competition in the marketplace can be clearly seen in deteriorating financial performance of the company. Stock prices are on a continuous decline from the year 2004. Also the company is lagging its major competitors in revenues and earnings. To improve the performance of the company, management has started implementing plans to reduce overhead costs focusing majorly on job cuts. Due to job cuts employees have started losing confidence in companys management and its goals and visions. There was no clear reasoning given for the layoffs by the management and the communication was done through e-mail not leaving any scope for further discussions.

Recommendations Respective managers should inform terminated employees about the layoffs in private meetings. This would able the management to better explain the objectives behind the termination.

CRITICAL ISSUES AND IMPLICATIONS ON THE PERFORMANCE OF THE COMPANY October 18, 2012 Page 2 of 2

A formal letter on companys letter head informing the laid off employee about his or her termination is a better approach showing companys respect for its employees. Managers should be informed adequately to inform their respective employees about the layoffs. Also managers should be more approachable to any employee who wants to ask question or discuss company policies and plans. Management should pay attention to remaining workforce to make sure employee confidence in company policies continues.