The electronics chain said those workers, who made up 8.5 percent of its in-store work force, were paid ''well above the market-based salary range'' for the jobs they did. They will be replaced by new employees who will work for less money.

Circuit City spokeswoman Jackie Foreman said the company needs to cut salary costs to stay competitive. ''Retail is an extremely competitive environment,'' she said.

Richards, a 15-year employee, said he made $19.93 an hour, the equivalent of $41,454 at 40 hours a week. Hammon, who worked there five years, said he made $16.45 an hour, the equivalent of $34,216. Foreman declined to say how much replacement workers will be paid, saying it will vary by region.

A typical retail salesperson in the Lehigh Valley made about $10.50 per hour in May 2005, the most recent numbers available from the U.S. Department of Labor.

Hammon and Richards said their wages were based on their former earnings in a commission-based system Circuit City used until about five years ago.

The layoffs leave them scrambling for new jobs and, just as important, for new health insurance. Both are in their early 60s and have struggled with health problems.

Richards has diabetes, as well as problems with his pancreas. Hammon was operated on three months ago for rectal cancer and suffered a major heart attack about eight years ago. Both men say their wives relied on their health coverage, as well.

The announcement by Circuit City, which also operates stores in Bethlehem Township and Phillipsburg, could have a wider impact on the way businesses treat their workers, according to human resources experts.

They say companies have made cost-driven layoffs for years, but have rarely made them public. Circuit City's announcement could help turn wage-based job cuts into a commonly accepted event.

Laid-off workers received severance payments based on their tenure with the company. They will also have a chance to reapply for jobs at lower wages, but not until 10 weeks have passed, which means they won't be eligible for their old pay levels.

Circuit City's Foreman said the workers were not offered the chance to take a pay cut and keep their jobs. ''In the retail environment, it's not an option that works to the benefit of the associate or the employer,'' she said.

In other words, workers tend to be reluctant to do their jobs for less money, said Patrick Cihon, an associate professor of law and public policy at Syracuse University.

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