Walmart sacks around 56 executives in India restructuring, focus to be shifted to e-commerce; firm to delay opening of new wholesale stores
The move underscores the struggles Walmart has faced in expanding its wholesale business in India.
TThe Bentonville, Arkansas-based company currently operates 28 wholesale stores where it sells goods to small shopkeepers, and not to retail consumers
While Walmart could slow down the pace of opening new wholesale stores, the focus will increasingly be on boosting sales through business-to-business and retail e-commerce
Some of the executives were sacked last week and more could be let go on Monday
New Delhi: Walmart Inc, the world’s largest retailer, has fired around 56 of its India executives as part of its restructuring in the country, three sources with direct knowledge told Reuters.
The move underscores the struggles Walmart has faced in expanding its wholesale business in India. The Bentonville, Arkansas-based company currently operates 28 wholesale stores where it sells goods to small shopkeepers, and not to retail consumers.
Eight of the 56 executives fired were in “senior management” roles and the rest from middle or lower management, Krish Iyer, President and CEO of Walmart India said in a statement.
“We are also looking for ways to operate more efficiently, which requires us to review our corporate structure to ensure that we are organised in the right way,” Iyer said, adding the fired executives had been offered enhanced severance benefits.
The firings mostly affected executives in the company’s real estate division because the growth in the wholesale model has not been that robust, two of the sources said.
Reuters reported the firings earlier on Monday, citing three people with direct knowledge of the matter, adding the move had mostly affected executives in Walmart’s real estate division, which takes care of store expansion, as the wholesale business model did not bring in expected growth.
“It’s happening because the focus is shifting to e-commerce rather than physical (stores),” said one source, who declined to be identified as the decision is not public.
Iyer, however, said Walmart remained committed to developing physical stores as well.
“We have recently made significant investments to serve our members better and will continue to do so. This includes investments in our brick-and-mortar stores as well as e-commerce,” Iyer added.
Walmart has placed bold bets on India’s e-commerce sector. In 2018, it paid $16 billion to acquire a majority stake in India’s online marketplace Flipkart, in its biggest global acquisition.
The second source added that while Walmart could slow down the pace of opening new wholesale stores, the focus will increasingly be on boosting sales through business-to-business and retail e-commerce.
Some of the executives were sacked last week and more could be let go on Monday, two sources said.
In a statement to The Economic Times newspaper, which first reported the news, Walmart said it was always looking for ways to operate more effectively and that “this requires us to review our corporate structure to ensure that we are organised in the right way to best meet the needs of our members”.
Walmart has around 600 staff in its India head office out of a total of around 5,300 nationally, one of the sources said.
Luxury retail shops may see sales remaining at a low level as the three years of lockdown has changed the shopping behaviour of mainlanders
According to CFO of Walmart, John David Rainey, 75 percent of Walmart's market share gains in food have come from households that earn more than $100,000 annually
Walmart is expanding its Live Better U project, which pays for part-time and full-time employees' tuition and expenses, by adding more college degrees and certificates