Wal-Mart laid off 450 workers at its headquarters as the world’s largest retailer attempts to become more nimble so it can better compete with the likes of Amazon.com.
There are more than 18,000 employees at the headquarters in Bentonville, a close-knit community in northwest Arkansas. The cuts were across all areas, from finance to global e-commerce. The company says the employees were spoken with individually early on Friday.
The layoffs follow months of rumours and arrived less than two months after Wal-Mart trimmed its annual earnings outlook as profits fell. That is partly because of hefty investments Wal-Mart has made in e-commerce as well as higher wages for hourly workers. A previous round of layoffs in Bentonville in 2010 eliminated 300 jobs but these are the largest cuts since 2009, when the company laid off 800 employees as the US emerged from recession.
While it is the behemoth of retail, Wal-Mart is attempting to make changes that will allow it to “move with speed and purpose”, according to a memo sent by CEO Doug McMillon to employees on Friday.
Wal-Mart is facing intense competition, ranging from Amazon.com and dollar stores to the traditional grocery store chains it has tried to challenge.
It is also trying to keep pace with the rapidly changing behaviour of shoppers who are jumping back and forth between their smartphones and store aisles when shopping. Wal-Mart’s US business is undergoing a major overhaul in response.
It’s trying to improve pricing and selection as well as beefing up customer service.
It’s also expanding the number of centres 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 laid off 1700 employees this year, largely at its headquarters in Minneapolis, and Whole Foods Market announced last week that it would cut 1500 jobs over the next eight weeks so that it can keep its prices competitive.
Job figures on Friday showed US employers scaled back sharply on hiring in September.
Among the hardest hit by the recession were lower income families, which make up a huge slice of Wal-Mart’s customer base.
Wal-Mart 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. —AP
Copyright Â© 2015 The New Zealand Herald. All rights reserved., source Newspaper