Wal-Mart Stores Inc. is undergoing another round of layoffs at its home offices in Bentonville, eliminating corporate-level positions as it continues managing costs and improving efficiency.
Multiple sources confirmed that the cuts began earlier this week and that the retailer's information systems division was one of the hardest-hit with about 300 positions eliminated.
Wal-Mart would not confirm the number of layoffs or the affected departments. The latest cuts are in addition to ones earlier this year that affected about 1,000 workers across multiple divisions. Those layoffs, which occurred before the end of the company's fiscal year on Jan. 31, included 511 employees at the Bentonville headquarters and another 174 across departments in two California locations.
When asked about this week's cuts, spokesman Randy Hargrove referred to what Wal-Mart said in January.
"To fuel our growth and our investments we have to manage our costs and our capital decisions with discipline," Hargrove said in a statement. "This means we will continue to find ways to operate more efficiently and effectively, true to our cost-conscious heritage."
He went on to say, "In order to achieve this, from time to time you'll see the company eliminate positions in an effort to stay lean and fast. In some areas, we'll invest in new positions but in other cases, we'll operate more efficiently and work to change our processes and become more digital to change the work itself."
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Any laid-off employees will receive up to 60 days of pay as they look for new jobs. There will be outplacement services, resume and skill training, and counseling through an employee-assistance program. If affected employees haven't found work after that 60-day period, they'll reportedly be offered severance packages based on length of service with the company.
The job cuts are taking place as Wal-Mart continues to restructure its business, becoming more of a digital enterprise under Chief Executive Officer Doug McMillon. McMillon told employees in an internal memo in January that the retailer would have to change inside to deliver the changes it wants customers to see on the outside.
Brian Yarbrough, a retail analyst with investment company Edward Jones, said it's not surprising to see Wal-Mart eliminate more positions because of the investments that are being made in e-commerce and technology.
The retailer previously said it plans for $11 billion in capital expenditures during fiscal 2018 and that more of it would go toward strengthening its e-commerce business. Those investments have weighed on the company's profits, and Wal-Mart continues to search for ways to cut costs.
"They don't want to take cost out of the stores because they're afraid they'll impact the customer experience like they did for many years, and that's actually improved recently," Yarbrough said. "So they don't want to go back on that promise. So it's like, 'Where do we cut?' They say they want to get more lean, want to get more lean. But it does beg the question, at some point, when do you start cutting into muscle and when does it start impacting productivity and everything else?"
The impact is being felt by employees in Bentonville.
Mervin Jebaraj, interim director of the Center for Business and Economic Research at the University of Arkansas' Sam M. Walton College of Business, said the restructuring is expected given the number of acquisitions and changes Wal-Mart has made recently within the organization.
Jebaraj also said there's a shortage of highly trained technology workers in Northwest Arkansas and surrounding areas, and he believes many of the employees cut by Wal-Mart will find new jobs soon.
"A large company always strategically reorganizes on a year-to-year basis," Jebaraj said. "On one hand, they may cut some jobs. On the other hand, they might hire in other divisions of their company as they reorganize their strategic priorities. But given how tight the labor market is in Northwest Arkansas, there should be no trouble to reabsorb most of the people that were let go."
A Section on 04/06/2017