Wal-Mart cuts another 250 jobs, shuts office

Wal-Mart plans to open another eight hypermarkets in Guangdong, Jiangxi, Yunnan, Jilin, Zhejiang and Sichuan provinces by the end of this year. [Photo/CHINA DAILY]

Move comes days after company axes 20 positions in restructuring exercise

Wal-Mart Stores Inc, the world's largest retailer by sales, is cutting 250 Chinese jobs and closing its regional office in Dalian in an effort to improve efficiency and regain its declining market share, it said. The moves come just days after it axed 20 senior level jobs in the country.

According to a statement, the company has been undergoing a major transformation in the last few years which has seen some organizational changes in its management structure.

The latest changes, it said, were aimed at consolidating its business in some regions and some divisions.

The latest 250 job losses represent 0.2 percent of its total workforce, it said, while management responsibilities previously carried out in the regional office in Dalian, in the south of Liaoning province, will be transferred to Beijing.

Last week, the US-based Wal-Mart dismissed around 20 mid- and senior-level executives as part of a restructure of its head office in the country.

Jason Yu, general manager of consumer information organization Kantar Worldpanel China, said the US retailer has seen relentless growth in competition from local retailers as well as from e-commerce, adding that he viewed the job cuts as a natural move for the company to be more responsive in the market.

"Too big is not necessarily a good thing," said Yu.

In its statement, Wal-Mart said that it still planned to open another nine new stores and one distribution center in China by the end of this year, bringing the total number of new stores and distribution centers opened this year to 31, which it said had created over 6,000 jobs.

"Wal-Mart China is on track to deliver against the plan of opening 110 new stores, clubs and distribution centers in 2014-16," said the statement.

Sean Clarke, president and CEO of Wal-Mart China, said: "Since 2012, we have been implementing strategic initiatives to regain price leadership, grow with a focus on business fundamentals, simplify the business, invest in the supply chain and technology, and develop energized associates.

"After two years of optimizing, customer feedback on products and service is improving."

Clarke said that according to AC Nielson Market Research, the demand for hypermarkets in China has increased.

Wal-Mart is set to open its 11th Sam's Club－a chain of membership-only retail warehouse clubs－in China, in Wuhan, capital of Hubei province.

By the end of 2014, Wal-Mart said it plans to open another eight such hypermarkets in Guangdong, Jiangxi, Yunnan, Jilin, Zhejiang and Sichuan provinces, bringing the total number of stores to 25.

The statement also added that Wal-Mart continues to invest in the remodeling of existing stores, and is expecting to spend 550 million yuan ($89.4 million) on 50 store revamps this year.

In 2016, it said it expects to open a giant 600 million yuan, 100,000 square-meter mall in Zhuhai, Guangdong province.