New Delhi: Walmart Inc, the world`s largest retailer, has fired around 50 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, Ark. based company currently operates 28 wholesale stores where it sells goods to small shopkeepers, and not to retail consumers.
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. "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.
Meanwhile, Walmart India President and CEO Krish Iyer said ''Walmart remains committed to growing its B2B Cash & Carry business in India. We opened 6 new Best Price modern wholesale stores, 1 Fulfilment Center and our sales grew 22% in 2019..
Giving information on company's future plan Iyer said, ''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. Our members are increasingly becoming omni-channel shoppers. We are thus investing heavily in technology and have a healthy pipeline of Best Price stores. This will provide our members a true omni-channel and convenient shopping experience in the future.''
Iyer added, ''We are also looking for ways to operate more efficiently, which requires us to review our corporate structure to ensure that we are organized in the right way. As part of this review, we have let go 56 of our associates across levels at the corporate office. All of the 56 impacted associates (8 in the senior management and 48 in the middle/ lower management) have been offered enhanced severance benefits and outplacement services to support their transition. A report appearing in the section of the Press speculating second round of layoffs in April is baseless and incorrect.''
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 leading business daily, which reported the news first, 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.