Circuit City - number two in US consumer electronics retailing behind Best Buy - is to slash 1,800 sales jobs in a bid to improve performance.
The cuts will cost the 626-store group about US$16 million (£9.9 million), but the company is convinced it will make it more competitive.
Remaining sales staff will all be paid on an hourly, rather than a commission-related, basis.
Chief executive Alan McCollough said: 'Over the past two years, we have reduced corporate overheads, and this effort will continue as we seek to simplify the organisation and reduce costs.'
Circuit City has also been relocating and remodelling its stores.