Wal-Mart layoffs after Hua Meng shuts down shop

Layoffs have become an issue that Wal-Mart China can't avoid after frequent shop closures. Yesterday it was reported that Wal-Mart has started large-scale layoffs this year, involving hundreds of people. Wal-Mart China responded yesterday that due to business development needs, the company adjusted its current structure and simplified its business processes. More than 20 mid-level management positions will be affected, and it is emphasized that this adjustment involves only a few posts.

According to the layoffs list released by the Internet, Wal-Mart China’s layoffs include hypermarkets and Sam's Club stores, involving procurement, information systems, cooperation, marketing, operations, and supply chain, among which the number of layoffs in supermarkets is the largest. It is reported that the layoffs from VP to middle managers are mostly employees who have worked for more than 15 years. According to sources close to Wal-Mart, Senior Purchasing Director, Retail Value-Adding Director, Self-Purchasing Director, Financial Budget Director, Senior Director of Project Management, and Sam's Club VP are among the layoffs. "No notice was given after the interview. Just leave."

According to available data, this is the fourth layoff of Wal-Mart China this year. In March, the Mercury Tower branch of Changchun Wal-Mart suddenly stopped business, and 135 employees were asked to transfer to foreign stores or competing to stay. This move was considered by employees as disguised layoffs and even led to 100-person rights-defense actions. In the same month, Wal-Mart's Chongqing Nanbin Store and Wal-Mart's two stores in Maanshan ceased operation one after another, followed by layoffs. Legal sources said that closing profitability or even losing stores is an economic type of layoffs. However, in accordance with the provisions of the Labor Law, it is necessary to inform employees and the Association 30 days in advance and do a good job in related resettlement.

In fact, from 2007 onwards, Wal-Mart China has reported news of layoffs from time to time. In December 2007, Wal-Mart Global Sourcing Center headquartered in Shenzhen had around 250 global layoffs, including 110 layoffs in China. In 2009, Shenzhen Wal-Mart laid off staff and paid senior employees were first punished. In 2012, Wal-Mart optimized the procurement team. Twenty-one of the country’s 29 purchasing offices were revoked, involving hundreds of people. Some analysts believe that before Chen Yaochang’s era of 2011, layoffs were made in order to save costs. In recent years, the decline in retail sales performance has been too fierce, and the cost of human resources has become higher and higher. Off-site layoffs are an important way for companies to stop loss.

Since last year, Wal-Mart has begun to start a store adjustment program in the Chinese market and plans to close 15-30 stores in the Chinese market in the next 18 months. The number of closed stores accounted for nearly 9% of Wal-Mart stores in China. Wal-Mart China stated that some job changes and structural adjustments are necessary stages in simplifying business processes in the process of change. At the same time, it will continue to promote the development plan of 110 new sites in 2014-2016, including new shopping malls and distribution centers. Efficient supply chain further strengthens the work of commercial regulations. "This adjustment involves only a few jobs. Our business development plan will also create about 19,000 new jobs or provide further career development opportunities for existing employees."