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Wal-Mart's Sam's Club to cut 2,300 workers

  • Article by: ANNE D'INNOCENZIO
  • Associated Press
  • January 24, 2014 - 5:35 PM

NEW YORK — Wal-Mart Stores Inc. said it's eliminating 2,300 workers at its Sam's Club division as it reduces the ranks of middle managers in a bid to be more nimble.

The layoffs, which cut 2 percent of the membership club's U.S. employee count of about 116,000, mark the largest since 2010 when the Sam's Club unit laid off 10,000 workers as it moved to outsource food demonstrations at its stores.

The cuts come as Sam's Club strives to compete better with Costco Wholesale Corp. and online players like Amazon.com's Prime membership service. They also follow layoffs announced by several other major retailers in recent weeks that include Macy's Inc., J.C. Penney and Target Corp.

Bill Durling, a spokesman at Sam's Club, says that a little less than half of the cuts were aimed at salaried assistant managers. The cuts are also eliminating some hourly workers. He says that each of the clubs had roughly the same number of workers regardless of how much revenue each store generated.

"We felt this was the right move to make sure we are positioning ourselves for growing in the future," said Durling in an interview with The Associated Press. "We are trying to rebalance our resources in the field to make sure we are investing in the clubs that have the higher growth potential and balancing resources across the chain."

He added that Sam's Club operates 630 units in the U.S. and Puerto Rico. He noted that the unit will be adding 15 or more clubs in the fiscal year starting on Feb. 1.

For the year ended Jan. 31, 2013, Sam's Club generated revenue of $56.4 billion, or 12 percent of Wal-Mart's net sales of $466.1 billion.

Durling said that those workers who received notices will continue to get paid for the next 60 days and will have time to re-apply for opportunities at Wal-Mart or other areas of Sam's Club's operations. After that time expires, they will receive severance.

"We're trying to treat our associates with utmost care and respect," he added.

Wal-Mart is based in Bentonville, Ark.

Shares slipped 3 cents to $74.39 in after-hours trading, after being down 54 cents to $74.42 Friday.

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