What can you say about a CEO who gets rid of the most experienced (and highly paid) part of his workforce, watches his company’s fortunes sink in the face of universal criticism over the plan, then blames poor financial results on “unexpected” fallout from the changes he put in place?

I say he’s an idiot, but I have been saying that about Circuit City’s workforce strategy for most of the year. I said it first in my “Last Word” column last April, then blogged on it here in May and again in August and even fellow blogger Kris Dunn got into it recently in his HR Capitalist blog.

The strategy put in place by Circuit City CEO Philip J. Schoonover is remarkably shortsighted: Get rid of your most senior, highest-paid (and most experienced) floor workers and replace them with lower-paid employees. Although the plan looks to be a money saver on paper, it doesn’t account for the skills lost when those people exit—such as product knowledge and the ability to help customers figure out what they want.

Circuit City has been in a freefall since Schoonover’s plan was put in place, and the most recent quarterly results show that the company continues to lose sales while its rivals (primarily Best Buy) get stronger and better. In fact, Circuit City’s stock dropped by another 25 percent last week when the latest quarterly results were announced.

“Circuit City reported a much worse-than-expected loss for the third quarter, with sharply lower sales and weakened margins,” said a report on The Street.com. “The retailer blamed the shortfall on its ongoing ‘transformation’ efforts—which have yet to transform the company.” The story went on to say that “earlier this year, the company announced a sweeping restructuring, with one of its plans involving the layoff of 3,400 employees in favor of lower-paid workers. Analysts say that has come back to bite the company as inexperienced staff results in weaker levels of customer service and disorder in its stores.”

But that’s not the best of it. What has to be galling to Circuit City investors and employees is the reaction from CEO Schoonover to this debacle. He says that he “underestimated the financial impact from the disruption of our transformation work.”

It’s hard to believe that anyone, much less a CEO and the architect of such a short-sighted workforce strategy, could have underestimated the potential downside of such an ill-conceived plan, but I guess you don’t get to be CEO of a company like Circuit City unless you have a personality brimming with chutzpah.

Sometimes people learn more from what goes really wrong than what goes really right. Schoonover’s Circuit City plan is one for business schools everywhere. It will undoubtedly be fodder for lectures on strategies that made no sense, yet were inflicted upon a company and were diligently followed—right over the cliff.

Here’s my first prediction for 2008: Circuit City’s board will eventually weigh in on Schoonover and his “underestimated” financial impact and will ring in the new year—perhaps a bit late—by finally giving him the boot. As someone who appreciates good workforce management, I say it can’t come soon enough.