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Wal-Mart Lays Off 450 Workers at Headquarters in Bentonville

4 min read

NEW YORK – Wal-Mart laid off 450 workers at its headquarters Fridayas the world’s largest retailer attempts to become more nimble so that it can better compete with the likes of Amazon.com.

There are more than 18,000 people who work at the headquarters in Bentonville, Arkansas, a close knit community in Northwest Arkansas. The cuts were across all areas, from finance to global e-commerce. The company says that the employees were spoken with individually early on Friday.

The layoffs follow months of rumors about them and they arrived less than two months after Wal-Mart trimmed its annual earnings outlook as profits fell. That is partly because of hefty investments Wal-Mart has made in e-commerce as well as higher wages for hourly workers.

A previous round of layoffs in Bentonville was announced in 2010 when 300 jobs were eliminated, but the latest marks the largest cuts since 2009, when the discounter laid off 800 employees as the U.S. emerged from recession.

While it is the behemoth of retail, Wal-Mart is attempting to make changes that will allow it to “move with speed and purpose,” according to a memo sent by Wal-Mart CEO Doug McMillon to employees on Friday.

Wal-Mart is facing intense competition on all fronts, ranging from Amazon.com and dollar stores to the traditional grocery store chains that it has tried to challenge.

It is also trying to keep pace with the rapidly changing behavior of shoppers who are jumping back and forth between their smartphones and store aisles when shopping.

Wal-Mart’s U.S. business is undergoing a major overhaul in response. It’s trying to improve pricing and selection as well as beefing up customer service. It’s also expanding the number of centers dedicated to fulfilling e-commerce orders and it announced this week that it would accelerate the expansion of its grocery deliveries.

“Our customers are changing. Retail is changing and we must change,” McMillon wrote in the memo obtained by The Associated Press. “We need to become a more agile company that can easily adapt to shifting customer demand.”

Even with the economy in recovery mode, retailers are getting leaner and more agile with competition only growing fiercer. Target laid off 1,700 employees this year, largely at its headquarters in Minneapolis. Whole Foods Market announced this week that it would cut 1,500 jobs over the next eight weeks so that it can keep its prices competitive.

“This is an important time in our history- requiring all of us to think critically about our business and not be afraid to challenge the status quo,” McMillon said in his memo.

And there are constant reminders that the global economy is still struggling, and that has not gone unfelt in the U.S.

September jobs figures released Friday showed U.S. employers cutting back sharply on hiring in September.

Among the hardest hit by the recession were lower income families, which makes up a huge slice of Wal-Mart’s customer base.

Wal-Mart is offering laid off employees 60 days of pay with benefits, and employees will get severance equivalent to two weeks pay for every year of service. It also will offer them job search assistance.

McMillon’s complete memo to Wal-Mart employees is republished below:

“Today we are announcing structure changes that will impact people we care about. As a leader, these are some of the toughest decisions to make. While difficult, I believe these changes will help us become a more nimble organization that serves customers better. Our customers are changing, retail is changing and we must change. We need to become a more agile company that can easily adapt to shifting customer demand. After months of evaluation, we’ve concluded there is an opportunity to better position our Home Office teams to move with speed and purpose.

“This results in 450 associates being displaced today. We are grateful for their service. Taking care of them in this transition is a priority, and we are providing these associates access to services and resources that will help them find their next opportunity. This is an important time in our history – requiring all of us to think critically about our business and not be afraid to challenge the status quo. For the company, this in part means pulling back in some areas and investing in others.

“Today you will be hearing from your leadership about the changes occurring in your area. Please engage your leaders and have the courage to ask questions. We must be transparent with each other so we can begin the process of moving forward. As we move into the holidays, stay focused on serving our customers. I’m optimistic about our future and the work we will do together. Thank you for all you do every day for each other and our great company.”

Doug McMillon, President and CEO, Walmart Stores, Inc.

(Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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