Wal-Mart Plans New Round of Job Cuts -- Update
January 10 2017 - 7:34PM
Dow Jones News
By Sarah Nassauer
Wal-Mart Stores Inc. is preparing to cut nearly 1,000 corporate
jobs before the end of the month, according to an executive
familiar with the situation, as the world's biggest retailer works
to cut costs and shift its focus to e-commerce.
It plans to eliminate the jobs before the end of its fiscal year
on Jan. 31, the person said. The cuts will fall broadly but are
expected to focus on Wal-Mart's U.S. operations, including the
human resources department, as well as the technology and
e-commerce divisions.
The plans mark one of Wal-Mart's largest rounds of corporate job
cuts as it works to preserve profits while making the company more
efficient and responsive to fast-changing consumer behaviors.
"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."
Many of the cuts will affect Wal-Mart's human resources
department, a large team that some senior executives believe should
be leaner or whose duties could be handled by outside consultants,
say other people familiar with the plans. Wal-Mart's chief
information officer, Karenann Terrell, will leave the company on
Feb. 24, Chief Executive Doug McMillon said in a memo to staff
Tuesday. The company didn't name a successor or Ms. Terrell's
future plans.
In late 2015 Wal-Mart laid off hundreds of workers at 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," Mr. 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.
Wal-Mart employees 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.
Write to Sarah Nassauer at sarah.nassauer@wsj.com
(END) Dow Jones Newswires
January 10, 2017 19:19 ET (00:19 GMT)
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