Walmart Lays Off 56 Managers in India -- Update
January 13 2020 - 7:54AM
Dow Jones News
By Eric Bellman
NEW DELHI -- Walmart Inc. has laid off more than 50 of its
managers in India as it pivots its focus to business-to-business
e-commerce to take on Amazon.com and other rivals in the South
Asian nation.
Walmart said Monday that it has let go of 56 managers -- eight
of who were senior -- as it reorganizes operations of its more than
25 Best Price wholesale outlets in India.
"Our members are increasingly becoming omni-channel shoppers,"
buying both online and offline, Krish Iyer, president and chief
executive of Walmart India said in a news release. "We are also
looking for ways to operate more efficiently, which requires us to
review our corporate structure to ensure that we are organized in
the right way."
Walmart India has a total of 5,391 employees in the country.
India's restrictions on foreign investment in retail have kept
Walmart from selling directly to consumers there for decades
through stores. Instead it has set up a wholesale stores. Growth
has been slow but it bought one of India's largest e-commerce
companies, Flipkart Group, for $16 billion in 2018 to turbocharge
its expansion.
The management shake-up is part of Walmart's plans to use the
know-how, connections and talent it acquired when it bought
Flipkart to grow much faster and better serve its members online,
said one person familiar with its plans.
The change in management was needed as the company shifts away
from opening more stores quickly and building its own logistics
chain, and invests more in developing e-commerce and delivery
technology, the person said.
Walmart's more than one million members customers in India are
mostly small businesses, such as restaurants, hotels and
mom-and-pop grocery stores, called kirana in India.
"You look at the kirana stores and there is a change of focus.
Members are going online now and fewer are going to stores," the
person said. "Business is growing very rapidly but the propensity
to visit stores is less today."
India's massive retail market is largely untouched by global
retailers and tough to crack because it is dominated by millions of
tiny shops, tea stalls and vegetable carts. Rather than battle this
powerful lobby, Amazon, Flipkart and other e-commerce leaders in
India have been trying to join forces with the local merchants by
hiring them for deliveries and helping supply their stores.
India's richest man, Mukesh Ambani, is about to launch his own
e-commerce initiative which is also trying to use the mom-and-pop
shows as intermediaries. Walmart's maneuvers should better set it
up for the new competition.
"We are thus investing heavily in technology and have a healthy
pipeline of Best Price stores," said Mr. Iyer in the release. "We
are also looking for ways to operate more efficiently, which
requires us to review our corporate structure to ensure that we are
organized in the right way."
Walmart denied local media reports that it was planning a second
round of layoffs or intended to pull out of the bricks-and-mortar
store business.
Write to Eric Bellman at eric.bellman@wsj.com
(END) Dow Jones Newswires
January 13, 2020 07:39 ET (12:39 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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