Filed under: Wal-Mart (WMT), China
Wal-Mart Stores, Inc. (NYSE: WMT) looks to be cutting positions in China according to this source. Based on what Huang Jianling — PR manager for Wal-Mart China — says, the cuts are needed to reduce the level of redundancy from Wal-Mart’s various Chinese operations, and will include purchasing positions up to senior management staff.
Although these “cost redundancies” were not detailed out by Jianling, the cost estimated to cut these various positions was estimated at right over $120,000. In other words, a pinch in the bucket compared to the relatively low salaries many Wal-Mart China employees receive.
Purchasing departments look to be centralized as locations in Singapore, Sri Lanka, and Turkey will be closed. Wal-Mart’s adjustments in these areas are due to a realignment of its global purchasing strategy, according to the company. That’s admirable, but all things considered, it should have never reached this state. The splintering of so many purchasing departments across what could be seen as redundant coverage areas was most likely the result of not managing global growth appropriately on Wal-Mart’s part.
But then again, the new “Employment Contract Law” that will take effect in China next year may be making Wal-Mart officials skittish when it comes to employee headcount in the region. The retailer has battled the formation of unions everywhere in the world, so the position reduction agenda here may fall in that territory.
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