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Though billed as its most pre- cious wealth by Wal-Mart Stores， Inc. on its website， employees in the retail giant have to face another wave of layoffs amid a stagnant retail industry in China.
On Nov. 26th， a news about Wal- Mart would cut jobs in China went viral on the Internet， saying the new wave of lay-offs has begun since Nov. 25th， involving hundreds of upper- and midlevel executives.
Dozens of executives in the Shenzhen-based headquarters of Wal- Mart China have been informed that they were being laid off as part of the company’s organizational restructuring， according to two sources familiar with the matter.
Wal-Mart China confirmed that the company was in the course of an orga-nizational restructuring to streamline its businesses under the need of business development， but declined to give more details of the restructuring and provide an actual number of lay-offs.
The company’s move to lay off its executives is likely to be for the sake of saving cost， in view of disappointing sales in its supermarkets and 1 Haodian in China， according to Ding Liguo， a senior expert in the retail industry.
Among the three profit engines for Wal-Mart’s businesses in China， namely 1 Haodian， supermarkets and Sam’s Club， only the latter saw a rise in sales.
Most of job cuts come from supermarket units
Hundreds of upper- and mid-level executives face the bleak prospect of losing their jobs， most of which have worked for Wal-Mart for more than 15 years， according to a source.
The wave of layoffs has caused wide public concern. An employee， who has worked for Wal-Mart for decades， said the layoffs were underway and the reason was an adjustment in the company rather than a shock from e-business.
Another source， who served as director in a department of the headquarters， also confirmed the layoffs.
“On Nov. 25th， the company sud- denly informed me that because of the organizational restructuring， my position was cancelled， without telling me about the specific reason for the restructuring，” said the director， who declined to be named.
It is learnt that Wal-Mart China only gave its staff a choice of leaving， never mentioning the solution for those who wanted to stay in the company.
“Even in the case that some jobs are cancelled due to the adjustment， the company should offer similar jobs for those who worked for more than ten years under an open-end contract. If not， the company will break the contract，” said Yan Yiming， a lawyer. “I have worked for the company for 17 years under an open-end contract. If the company wants to lay off us because of the organizational restructuring， it should first negotiate with us. However， there is no negotiation and it just gives us a choice to accept，” said the director.
The company made it clear that there is only an unchangeable solution， and in view that so many people are involved in the lay-offs， if employees refuse to accept it， the company would unilaterally terminate the labor contracts， according to the director.
Several senior executives in the headquarters are said to have been informed of their lay-offs， including a senior procurement director named Hu Yi， two procurement directors named Zhuo Yongxiang and Wang Jinjin， and a director of value-added retail department named Wang Haitao， as well as a personal good procurement director named Liu Yan.
A list of lay-offs under the director level provided by the director shows that the company plans to cut hundreds of jobs across the country， most of which are related to its supermarket business.
“The list should be our company’s internal file， not a fake one， but it has not yet come into effect，” said the director.
It is said that some executives have accepted the only solution provided by the company so far.
Year-end job cuts follow internal adjustments
Since 2012 when the traditional retail industry went on a downward trajectory， a big internal adjustment has become an almost routine for Wal-Mart during the fourth quarter of every year.
In November 2012， the company carried on a big adjustment to China’s procurement offices， merging around 30 procurement offices across the country into eight regional procurement offices， respectively located in Shenzhen， Dalian， Beijing， Shanghai， Wuhan， Chengdu， Xiamen and Kunming cities.
In October 2013， the company made another big adjustment to the procurement department， including expanding the scope of centralized procurements under a unified management with category， supplier and commodity as classification units， reasonably arranging the number of the decision-making group， and further strengthening personnel allocation for the store replenishment， shelf display， price analysis team， etc.
“Due to the need of business development， the company is adjusting its current business structure to simplify business process， which will affect more than 20 mid-level management jobs，”Wal-Mart China said in an email interview. “The company is continuing its efforts to reform their business structure， inevitably resulting in some job changes during the course，” said the spokesman for Wal-Mart China.
“The company very much appreciates their contributions and efforts and will help them as much as possible，”added the spokesman.
Cost reduction lies behind job cuts
Insiders believe the massive job cuts are due to the company’s poor performance.
“Wal-Mart is relying on its supermarkets， Sam’s Club and 1 Haodian for development in China，” said Ding.
However， Wal-Mart’s supermarket business in China has been on a downward trend for a while and sales in1 Haodian were not good as expected. Only Sam’s Club fared well.
Wal-Mart closed 14 outlets in China in 2013 and planned to shut down another 20 outlets by the end of 2014.
In April 2014， Ke Junxian， former COO of Wal-Mart China， was promoted to President and CEO of the company as part of adjustments to the management of Wal-Mart Asia region.
“The main reason for the company to lay off its executives is to reduce costs，” said Ding.
“In a bid to deliver a favorable annual earnings report to the board， the management needs to reduce expenditures in the case of poor sales by yearend，” explained Ding.
Some insiders said the organizational restructuring is not the reason for the job cuts， as it is not necessary for the company and there are no major moves or big ideas for the supermarkets.
On Nov. 26th， a news about Wal- Mart would cut jobs in China went viral on the Internet， saying the new wave of lay-offs has begun since Nov. 25th， involving hundreds of upper- and midlevel executives.
Dozens of executives in the Shenzhen-based headquarters of Wal- Mart China have been informed that they were being laid off as part of the company’s organizational restructuring， according to two sources familiar with the matter.
Wal-Mart China confirmed that the company was in the course of an orga-nizational restructuring to streamline its businesses under the need of business development， but declined to give more details of the restructuring and provide an actual number of lay-offs.
The company’s move to lay off its executives is likely to be for the sake of saving cost， in view of disappointing sales in its supermarkets and 1 Haodian in China， according to Ding Liguo， a senior expert in the retail industry.
Among the three profit engines for Wal-Mart’s businesses in China， namely 1 Haodian， supermarkets and Sam’s Club， only the latter saw a rise in sales.
Most of job cuts come from supermarket units
Hundreds of upper- and mid-level executives face the bleak prospect of losing their jobs， most of which have worked for Wal-Mart for more than 15 years， according to a source.
The wave of layoffs has caused wide public concern. An employee， who has worked for Wal-Mart for decades， said the layoffs were underway and the reason was an adjustment in the company rather than a shock from e-business.
Another source， who served as director in a department of the headquarters， also confirmed the layoffs.
“On Nov. 25th， the company sud- denly informed me that because of the organizational restructuring， my position was cancelled， without telling me about the specific reason for the restructuring，” said the director， who declined to be named.
It is learnt that Wal-Mart China only gave its staff a choice of leaving， never mentioning the solution for those who wanted to stay in the company.
“Even in the case that some jobs are cancelled due to the adjustment， the company should offer similar jobs for those who worked for more than ten years under an open-end contract. If not， the company will break the contract，” said Yan Yiming， a lawyer. “I have worked for the company for 17 years under an open-end contract. If the company wants to lay off us because of the organizational restructuring， it should first negotiate with us. However， there is no negotiation and it just gives us a choice to accept，” said the director.
The company made it clear that there is only an unchangeable solution， and in view that so many people are involved in the lay-offs， if employees refuse to accept it， the company would unilaterally terminate the labor contracts， according to the director.
Several senior executives in the headquarters are said to have been informed of their lay-offs， including a senior procurement director named Hu Yi， two procurement directors named Zhuo Yongxiang and Wang Jinjin， and a director of value-added retail department named Wang Haitao， as well as a personal good procurement director named Liu Yan.
A list of lay-offs under the director level provided by the director shows that the company plans to cut hundreds of jobs across the country， most of which are related to its supermarket business.
“The list should be our company’s internal file， not a fake one， but it has not yet come into effect，” said the director.
It is said that some executives have accepted the only solution provided by the company so far.
Year-end job cuts follow internal adjustments
Since 2012 when the traditional retail industry went on a downward trajectory， a big internal adjustment has become an almost routine for Wal-Mart during the fourth quarter of every year.
In November 2012， the company carried on a big adjustment to China’s procurement offices， merging around 30 procurement offices across the country into eight regional procurement offices， respectively located in Shenzhen， Dalian， Beijing， Shanghai， Wuhan， Chengdu， Xiamen and Kunming cities.
In October 2013， the company made another big adjustment to the procurement department， including expanding the scope of centralized procurements under a unified management with category， supplier and commodity as classification units， reasonably arranging the number of the decision-making group， and further strengthening personnel allocation for the store replenishment， shelf display， price analysis team， etc.
“Due to the need of business development， the company is adjusting its current business structure to simplify business process， which will affect more than 20 mid-level management jobs，”Wal-Mart China said in an email interview. “The company is continuing its efforts to reform their business structure， inevitably resulting in some job changes during the course，” said the spokesman for Wal-Mart China.
“The company very much appreciates their contributions and efforts and will help them as much as possible，”added the spokesman.
Cost reduction lies behind job cuts
Insiders believe the massive job cuts are due to the company’s poor performance.
“Wal-Mart is relying on its supermarkets， Sam’s Club and 1 Haodian for development in China，” said Ding.
However， Wal-Mart’s supermarket business in China has been on a downward trend for a while and sales in1 Haodian were not good as expected. Only Sam’s Club fared well.
Wal-Mart closed 14 outlets in China in 2013 and planned to shut down another 20 outlets by the end of 2014.
In April 2014， Ke Junxian， former COO of Wal-Mart China， was promoted to President and CEO of the company as part of adjustments to the management of Wal-Mart Asia region.
“The main reason for the company to lay off its executives is to reduce costs，” said Ding.
“In a bid to deliver a favorable annual earnings report to the board， the management needs to reduce expenditures in the case of poor sales by yearend，” explained Ding.
Some insiders said the organizational restructuring is not the reason for the job cuts， as it is not necessary for the company and there are no major moves or big ideas for the supermarkets.