Wal-Mart Plans New Round of Job Cuts
January 10 2017 - 1:26PM
Dow Jones News
By Sarah Nassauer
Wal-Mart Stores Inc. is preparing another round of job cuts at
its headquarters before the end of the month, according to people
familiar with the situation.
The world's biggest retailer plans to eliminate hundreds of jobs
before the end of its fiscal year on Jan. 31, both at headquarters
and regional personnel that supports stores, these people said.
Many of the eliminations will affect Wal-Mart's human resources
department, a large team that some senior executives believe should
be more efficient or whose duties could be handled by outside
consultants, said these people. Other departments could be affected
as well, say these people.
"We are always looking for ways to operate more efficiently and
effectively," said Wal-Mart spokesman Greg Hitt. "While we
continually look at our corporate structure, we have not made any
announcements."
The company has been cutting jobs to preserve profits while
investing billions to boost e-commerce sales, improve stores and
raise wages for store employees. In late 2015 Wal-Mart laid off
hundreds of workers in its Bentonville, Ark., headquarters. In
September, it cut about 7,000 back-office jobs in its stores,
automating some tasks by adding cash recyclers that count
money.
"We need to manage expenses even better, which includes changing
how we do work inside the company," Chief Executive Doug McMillon
said during an investor presentation in October. Wal-Mart has
predicted that per-share adjusted earnings in fiscal 2018 will be
flat compared with fiscal 2017, then fall at the low end of its
2019 target of 5% to 10% growth.
Other retailers have recently moved to slash jobs and close
stores as they battle sluggish sales and try to save money to
invest in their e-commerce efforts. Last week, Macy's Inc. said it
would close stores, cutting 10,000 jobs and streamlining
operations.
Wal-Mart closed more than 150 U.S. stores last January, then in
October said new-store openings would slow, but hasn't announced
plans for another round of large-scale closures.
In late 2015, Wal-Mart hired Jacqui Canney, an executive who had
spent decades with Accenture Ltd., to lead its human-resources
department. Some employees in the department have been told to find
other jobs internally or externally by the end of the month, said
one of the people familiar with the situation.
In total, the planned job cuts will affect a small percentage of
Wal-Mart's roughly 18,000 Bentonville-based staff. But the series
of reductions show how the retailer is working to maintain profits
at a time of change in the industry.
Wal-Mart has spent heavily over the past two years to fend off
Amazon.com Inc. and smaller, fast-growing discounters like Aldi. In
the investor presentation last fall, executives said Wal-Mart would
steer more of its $11 billion in annual budget toward boosting
e-commerce sales, technology used in stores and on customer
services. In September, Wal-Mart spent $3.3 billion to purchase
Jet.com Inc., an unprofitable e-commerce startup.
"We have a plan to win with customers and drive growth. We will
be disciplined with our cost and capital as we do it," said Mr.
McMillon during the presentation.
(END) Dow Jones Newswires
January 10, 2017 13:11 ET (18:11 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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