WASHINGTON: Wal-Mart Stores Inc laid off 450 workers at its headquarters as the world’s largest retailer attempts to become more nimble so that it can better compete with the likes of Amazon.com.
There are more than 18,000 people who work at the headquarters in Bentonville, Arkansas, a close-knit community in northwest Arkansas. The cuts, from finance to global e-commerce, follow months of rumors about them and they arrived less than two months after Walmart trimmed its annual earnings outlook as profits fell. That is partly because of hefty investments Walmart has made in e-commerce, as well as higher wages for hourly workers.
While it is the behemoth of retail, Walmart is attempting to make changes that will allow it to “move with speed and purpose,” according to a memo sent by Walmart chief executive officer Doug McMillon to employees.
Walmart is facing intense competition on all fronts, ranging from Amazon.com and dollar stores to the traditional grocery store chains that it has tried to challenge.
It is also trying to keep pace with the rapidly changing behavior of shoppers, who are jumping back and forth between their smartphones and store aisles when shopping.
Walmart’s US business is undergoing a major overhaul in response. It is trying to improve pricing and selection, as well as beefing up customer service.
It is also expanding the number of centers dedicated to fulfilling e-commerce orders and it announced this week that it would accelerate the expansion of its grocery deliveries.
“Our customers are changing. Retail is changing and we must change,” McMillon wrote in the memo. “We need to become a more agile company that can easily adapt to shifting customer demand.”
Even with the economy in recovery mode, retailers are getting leaner and more agile with competition only growing fiercer. Target Corp laid off 1,700 employees this year, largely at its headquarters in Minneapolis, Minnesota. Whole Foods Market Inc announced this week that it would cut 1,500 jobs over the next eight weeks so that it can keep its prices competitive.
“This is an important time in our history, requiring all of us to think critically about our business and not be afraid to challenge the status quo,” McMillon said in the memo.
There are constant reminders that the global economy is still struggling and that has not gone unfelt in the US.
Job figures released by the US government showed US employers scaled back sharply on hiring last month and added fewer jobs than previously forecast in July and August.
Among the hardest hit by the recession were lower-income families, who make up a huge slice of Walmart’s customer base.
Walmart is offering laid-off employees 60 days of pay with benefits, and employees will get severance equivalent to two weeks’ pay for every year of service. It also will offer them job search assistance.
Separately, Delta Air Lines Inc is planning an unspecified number of job cuts among its 10,000 management and salaried employees in a move to boost productivity.
The reductions will affect support roles such as human resources and communications, not front-line workers on planes, spokeswoman Ashley Black said in a telephone interview.
The moves might come in locations worldwide, including Delta’s headquarters in Atlanta, Georgia, said Black, who would not elaborate on specifics of the dismissals.
“We must continue to look for ways to improve productivity and stay nimble particularly given that revenue has declined this year,” Black said in a statement. “Over the course of the next few months, Delta will reduce some salaried positions while continuing to hire flight attendants, pilots, reservations specialists and other front-line employees.”
