Walmart slashes ‘a few dozen’ corporate jobs

Dive Brief:

  • Walmart is eliminating “a few dozen” corporate positions, mostly in merchandising and replenishment, according to a Talk Business and Politics report.
    “As we said in January, we’re continuing to look at how the company is structured, which includes investing in and adding jobs in some areas and eliminating some in a few others,” Walmart spokesperson Randy Hargrove told Retail Dive. “This is all about aligning and creating efficiencies as we change how we work to seamlessly serve our customer through our stores and e-commerce.”

  • The retail giant this year has been downsizing its corporate operations and some of Silicon Valley-based tech operations. In April, some 300 jobs were cut in information systems, following two other rounds of layoffs announced in January, when 1,000 jobs were eliminated from the supply chain group and 200 e-commerce positions were cut. But it’s not all cuts: Hargrove said that there were several several dozen promotions last week, too, including of category team assistants to merchandise specialists. 

  • Meanwhile, just after the announcement of a set of policy initiatives designed to boost U.S. manufacturing, Walmart for the first time has opened its online marketplace to foreign sellers, Reuters reports.

Dive Insight:

In January, Walmart President and CEO Doug McMillon and Walmart U.S. E-commerce Chief Marc Lore each sent Wal-Mart employees a memo explaining that leadership changes at the company will help bring together its stores and online leadership roles. That set off a cascade of layoffs and team re-alignment that has included the departure of some longtime Walmart veterans.

The major shifts are widely seen as a consequence of Walmart’s redoubled effort to take on Amazon and jump-start what had been a mostly lackluster e-commerce performance. That all began with the retailer’s acquisition last year of Amazon challenger That has paid off, at least in terms of raw e-commerce sales: In its most recent quarter, Walmart’s e-commerce sales ballooned 63% with an attendant 69% rise in digital gross merchandise volume, as same-store sales increased 1.4% and traffic to stores rose 1.5%. 

The promotions within the merchandising teams is an effort to not only recognize the work but also build talent, Hargrove said. More broadly, Walmart’s streamlining is a natural part of the evolution of a brick-and-mortar giant that is a half-century old with thousands of stores and a major presence in the U.S. (and globally), retail analyst Nick Egelanian, president of retail development consultants SiteWorks International, told Retail Dive in an email.

“I believe that these cuts are typical of retailers transitioning from high growth to maturity,” he said. “At least as it pertains to store growth, the company is in exactly that transition with store expansion virtually at a standstill in the U.S. now. The fact that Walmart is now undertaking a costly internet expansion likely relates, at least indirectly, to where it is prioritizing spending, but I don’t think it is the prime reason.”

Walmart’s move to open its marketplace to overseas vendors is also likely an effort to expand what has been a largely neglected aspect of its retail operations to a more effective arrow in its e-commerce quiver. Amazon’s marketplace is an e-commerce juggernaut in its own right: Half of the merchandise sold on its site comes from its third-party sellers. Walmart’s own marketplace, launched in 2009, is gaining fast, in part because many merchants want to diversify their outlets beyond Amazon’s marketplace, according to recent research from eMarketer.

Opening things up, though, will likely bring a host of complications, including fulfillment and possibly an increase of counterfeit sales, which for the marketplaces of Alibaba, Amazon, eBay and even Etsy have proven to be difficult to monitor. 

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