Originally published January 13, 2018 at 04:30a.m., updated January 15, 2018 at 04:30a.m.
Wal-Mart Stores Inc. is preparing to eliminate about 1,000 corporate positions before the end of the fiscal year in ongoing efforts to control costs and improve efficiency.
The cuts are expected by Jan. 31, which is the last day of the retailer's fiscal 2018, according to a report Friday by The Wall Street Journal. The news outlet cited people familiar with the matter as saying the cuts are expected to be broad-based and will primarily affect workers at the company's headquarters in Bentonville.
Wal-Mart would not confirm late Friday any plans to cut workers.
"As we've previously stated, we've been looking at our structure for some time as we explore ways to operate more effectively," Wal-Mart spokesman Randy Hargrove said in an emailed statement. "We continue to do that but are not going to comment on rumors and speculation."
The report comes a day after Wal-Mart said it was raising its minimum wage to $11 an hour and would offer employees one-time bonuses of up to $1,000. But the company also confirmed Thursday that it was closing 63 Sam's Clubs across the U.S., part of a plan to consolidate its stores and fuel its e-commerce business. As many as 12 of those stores will be converted into e-commerce fulfillment centers.
The closings announced Thursday are expected to affect thousands of Sam's Club employees.
Wal-Mart has had several rounds of job cuts at the corporate level over the past year.
Near the end of its fiscal year last January, the company eliminated about 1,000 positions across multiple divisions. Job cuts included 511 workers in Bentonville and another 174 across departments in two California locations.
At the time, Chief Executive Officer Doug McMillon said in an internal memo that the retailer had to make changes within to be able to deliver the changes that its customers wanted on the outside.
"From time to time, you'll see the company eliminate positions in an effort to stay lean and fast," McMillon wrote.
The company also eliminated about 300 positions in its information systems division in an April round of cuts, and a "few dozen" workers lost their jobs in July.
Alan Ellstrand, associate dean of the Sam M. Walton College of Business at the University of Arkansas, Fayetteville, said restructuring is painful for those affected. But it's something companies like Wal-Mart -- which has been investing heavily in its e-commerce business to better compete with retailers like Amazon.com -- must do as they reassess their business models.
"Periodically you have to have some reductions to stay cost-effective," said Ellstrand, who specializes in corporate strategy. "I think it's just part of the normal business cycle and normal operational approach that they have to go through."
Mervin Jebaraj, director of the Center for Business and Economic Research at the UA Walton College of Business, said Wal-Mart has routinely restructured its workforce over the past few years as retail continues to evolve. He also believes that Northwest Arkansas can weather a large round of Wal-Mart job cuts.
"I think it is likely that a lot of those jobs can be reabsorbed," Jebaraj said. "Depending on the level of the employee leaving Wal-Mart, they may not make the same amount of money. So you'll see some incomes go down. But, in general, the employment market here is strong enough to absorb it."
In addition to the report of looming cuts in Bentonville, the company is shaking up management roles in its U.S. stores.
The retailer plans to remove about 3,500 store co-managers, who are in salaried positions, according to a source familiar with the decision. A scale-back on the number of co-managers was also reported by Bloomberg News, which cited multiple sources familiar with the plan.
The management changes come as Wal-Mart plans to add about 1,700 lower-paying assistant store manager positions. That is expected to more clearly define the co-manager job as a steppingstone for a store manager role. Employees in the positions that are being eliminated will have an opportunity to apply for other Wal-Mart jobs, according to the source.
Wal-Mart continues to compete with retailers like Amazon.com and Target Corp. In September, the company revealed plans to consolidate the number of business divisions from six to four and to trim the number of regions from 44 to 36 to improve the efficiency of its operations.
Co-managers are one rung below store managers in the company's management structure. Under co-managers are assistant store managers. A typical Wal-Mart store could have had as many as four co-managers under the previous structure, but the largest stores will now have a maximum of three, according to the source.
"Retail is changing rapidly and we are transforming to meet the needs of our customers," Wal-Mart spokesman Blake Jackson said in an emailed statement earlier Friday. "We have a growing emphasis on serving customers seamlessly however they want to shop -- in stores, online, from their mobile device or through pickup or delivery. To help compete and win in this environment, we must make changes across our company to enable further investments in our strategic business priorities and growth."
A Section on 01/13/2018
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