RICHFIELD, Minn. — Best Buy is eliminating 400 jobs at its headquarters in Richfield.

The electronics retailer says it notified employees Tuesday of the job cuts as part of its plan to eliminate about $150 million in administrative costs.

Dave Brennan, a St. Thomas marketing professor, said Best Buy made a good decision because sales have leveled off in the last four years, making it difficult to keep up with expenses.

“As a result, they need to make sure that their costs are down to where they can continue to operate,” Brennan said.

Last April, Best Buy announced the closure of 50 stores including seven in California, six in Illinois and six in Minnesota. Brennan said stores also have decreased in floor space.

“Instead of having a 45,000 square feet selling space, they now have about 30,000 square feet, which means they also cut the ‘Blue Shirts’ down so they don’t have as many folks on the floor as they once did,” Brennan said.

Senior Tyler Erstad, who accepted a job at Best Buy after graduating this May, said he isn’t worried about losing his spot at the company.

“Usually when big corporations lay off people, it’s mostly middle managers, people that make more than $80,000 a year,” Erstad said. “I am the cheapest labor they have coming in this summer. They want to cut their expenses and lead to more cheap labor, which is what the incoming workforce they have in the summer is.”

At an investors meeting last November, Best Buy CEO Hubert Joly promised to remove $725 million in annual costs in order to compete in today’s market.

Erstad said Best Buy is remodeling its brand to “fit the new industry.”

“I thought it was looking bad but recently in last three months, the new leadership at Best Buy has really turned it around,” Erstad said. “In the past, they had these big box stores that would draw a lot of people … but now, the electronics industry is changing to more online.”

Brennan thinks in order to remain competitive, Best Buy needs to make improvements for consumers.

“Well they need to improve the customer experience in the store, and they also need to ramp up their online presence,” Brennan said.

The St. Paul Pioneer Press reports the layoffs represent the first phase of Best Buy’s cost-saving initiatives, with additional reductions to come throughout the year.

Best Buy employs 8,000 in Minnesota, but has not disclosed how many workers are at its headquarters.