Wal-Mart to layoff nearly 800 employees Arkansas HQ; to build fewer new stores

Operational changes introduced for cost reduction at Wal-Mart Stores entail a layoff of at least 800 employees at the retailer's headquarters in Bentonville, northwestern Arkansas.

Informing the employees about the proposed job-cuts, Wal-Mart CEO Mike Duke wrote in a memo that the layoffs will come in the real estate, merchandising, marketing, and support divisions of the company's US division, as well as in Sam's Club retail division. The memo said that the store and club operations of the company will remain unaffected by the announced cuts.

Duke said that unprecedented times mark the beginning of the new fiscal year. He added: "While the number of associates that will be impacted by the restructuring is very small compared to the 2.2 million associates we have worldwide, I can assure you that we will treat them with care and dignity and help support them during their transition, consistent with our basic beliefs and respect for the individual."

According to Wal-Mart spokesman, David Tovar, quite a few positions are being relocated rather than being eliminated. As a part of the company's expansion plan in general, Wal-Mart intends generating new jobs in its stores and clubs divisions.

In addition to the announced layoffs, the world's biggest retailer also plans to build fewer new stores this year - 125 to 140 - in comparison to the last year's 166 new stores last year.

Wal-Mart to Lay off 100 Employees in China

Mingpao News Nov 07, 2007


Wal-Mart plans to lay off its employees in China, possibly due to substantial increase in future labor costs. (Getty Images)
Wal-Mart Stores Inc., the world's largest U.S.-based retailer, will lay off about 100 employees in China as a part of its restructuring plan to adapt to the global procurement trend.

According to a report from the Guangzhou-based 21st Century Business Herald, Mr. Hu, a retrenched employee at Wal-Mart's Shanghai branch, received a notice of Wal-Mart on October 22 saying: "We regret to inform you that your contract with the Wal-Mart Global Purchasing Center in Shanghai will be terminated as of November 30, 2007."

Another layoff employee said the branches of Wal-Mart's Global Purchasing Centers in Shenzhen, Shanghai, Putian and Dongguan, all issued similar layoff notices on the same day.

A human resource manager from a large foreign enterprise, while commenting about the reason for this sudden employment cut, said that after the enforcement of China's new Labor Contract Law, labor costs would be significantly increased, and would also make future layoffs more difficult. Wal-Mart cutting employment now, is probably based on the consideration of reducing future labor costs.

Another thing worth mentioning is that signs indicate Wal-Mart's huge purchasing is showing a trend towards other lower cost countries and regions.

Dong Yuguo, supervisor of public relations of Wal-Mart China, said the layoffs at this time are part of the resource optimization and restructuring plan of Wal-Mart's Global Purchasing Centers, not exclusive to China.

He added, the optimization and restructure of Wal-Mart's labor force will help adapt to changes in current global procurement trend. More than 200 employees will be laid off globally. About half of them will be in China.

Dong said the layoff decision was made by Wal-Mart's Global Purchasing Centers and detailed actions would be implemented based on local labor laws.

Mingpao, however, quoted a veteran lawyer by stating Wal-Mart's layoffs have broken China's Labor Contract Law at least in terms of operating procedure.


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