by justinb
25. January 2010 07:22
Walmart's success with its rolling back prices campaign is taking on new meaning as the retail giant is now rolling back jobs. The 11,000 plus job cuts represent approximately 10 percent of Walmart's employee base. The job cuts come following a strong 4th quarter for 2009, with Walmart sales exceeding 60 billion. So why the job cuts if sales are up? Two words - Sam's Club.
Sam's club which is Walmart's membership chain isn't fairing as well as its competitors in that space i.e. Costco and BJ's. So in an an attempt to be more competitive in the wholesale club membership space, Walmart's believes outsourcing its food sampling program to Shopper Events is necessary. Even more stunning, Walmart's PR is passing off the largest Walmart job cut ever as an -- investment. What's the basis for the idea of 11,000 job cuts as an investment? Well Walmart states that Shopper Events will need to hire approximately the same number of jobs as Walmart is currently axing. Cunning. So the 11,000 folks loosing their jobs shouldn't really fret the situation since they can always apply at Shopper Events for the same job that they are currently performing. In other words is really shouldn't be a big deal to trade in a "bird in the hand" for a "bird in the bush".
For Walmart, the whole investment pitch will likely be a hard sell to its employee base. Moreover, that sell fights gravity even more so, considering the 1,500 full-time employees that already received the axe this year. Granted, the 11,000 job cuts slated for Sam's Club are mostly part-time positions but hey a job is a job these days. For many American's a part-time job is the only job to be had; for others a part-time job in conjunction with a full-time job is what it takes to make the numbers work. So needless to say, Walmart rolling back jobs isn't anything to be excited about. Even worse, image if Walmart decides to reverse the rolling back prices campaign in favor of price increases. Hopefully, rolling back jobs at Sam's club isn't an early warning sign of doing away with the "low price leader" title. 