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Walmart America cutting head office jobs

Retail is changing and 'we must change,' says company CEO Doug McMillon

Doug McMillon-Walmart

Walmart laid off 450 workers at its headquarters Friday as the world’s largest retailer attempts to become more nimble so that it can better compete with the likes of Amazon.com.

There are more than 18,000 people who work at the headquarters in Bentonville, Arkansas, a close knit community in northwest Arkansas. The cuts were across all areas, from finance to global e-commerce. The company says that the employees were spoken with individually early on Friday.

The layoffs follow months of rumours about them and they arrived less than two months after Walmart trimmed its annual earnings outlook as profits fell. That is partly because of hefty investments Walmart has made in e-commerce as well as higher wages for hourly workers.

A previous round of layoffs in Bentonville was announced in 2010 when 300 jobs were eliminated, but the latest marks the largest cuts since 2009, when the discounter laid off 800 employees as the U.S. emerged from recession.

While it is the behemoth of retail, Walmart is attempting to make changes that will allow it to “move with speed and purpose,” according to a memo sent by Walmart CEO Doug McMillon (pictured) to employees on Friday.

Walmart is facing intense competition on all fronts, ranging from Amazon.com and dollar stores to the traditional grocery store chains that it has tried to challenge.

It is also trying to keep pace with the rapidly changing behaviour of shoppers who are jumping back and forth between their smartphones and store aisles when shopping.

Walmart’s U.S. business is undergoing a major overhaul in response. It’s trying to improve pricing and selection as well as beefing up customer service. It’s also expanding the number of centres dedicated to fulfilling e-commerce orders and it announced this week that it would accelerate the expansion of its grocery deliveries.

“Our customers are changing. Retail is changing and we must change,” McMillon wrote in the memo obtained by the Associated Press. “We need to become a more agile company that can easily adapt to shifting customer demand.”

Even with the economy in recovery mode, retailers are getting leaner and more agile with competition only growing fiercer. Target laid off 1,700 employees this year, largely at its headquarters in Minneapolis. Whole Foods Market announced this week that it would cut 1,500 jobs over the next eight weeks so that it can keep its prices competitive.

“This is an important time in our history–requiring all of us to think critically about our business and not be afraid to challenge the status quo,” McMillon said in his memo.

And there are constant reminders that the global economy is still struggling, and that has not gone unfelt in the U.S.

September jobs figures released Friday showed U.S. employers cutting back sharply on hiring in September.

Among the hardest hit by the recession were lower income families, which makes up a huge slice of Walmart’s customer base.

Walmart is offering laid off employees 60 days of pay with benefits, and employees will get severance equivalent to two weeks pay for every year of service. It also will offer them job search assistance.

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