NEW YORK (AdAge.com) -- Walmart Stores is laying off 700 to 800 employees from its Bentonville, Ark., headquarters, including marketing personnel, in a surprise move by a company that's continued to grow through the recession and has been one of the most resilient retailers because of its value positioning.
The job cuts will include some people in the U.S. marketing operations of Walmart, but not marketing at Sam's Club or international, said Walmart spokesman David Tovar. They will reduce employment of 14,000 at the retailer's Northwest Arkansas headquarters operations by about 5%.
"Part of the moves were to ensure that we continue to do well into the future," Mr. Tovar said. "They're designed to ... increase operational efficiencies to support our strategic growth plans and help reduce our overall costs."
Despite the layoffs at the home office, Mr. Tovar said the company is creating management jobs in other locations, such as its apparel-buying and merchandising operations in New York, and adding store-level and district jobs nationwide.
The layoffs are particularly surprising, said one person close to the company, because Walmart traditionally has run a lean operation at its headquarters.
Not about improving margins
But the person said Walmart's focus has been squarely on improving margins for more than a year, which could require belt-tightening despite continued top-line growth.
Mr. Tovar said maintaining or improving margins "is not what this is about. It's about making sure we have the right people doing the right jobs in the right areas."
Though Walmart has yet to report earnings for the recently concluded fiscal fourth quarter ended Jan. 31, net income rose 6.6% to $3 billion on a 7.5% increase in sales to $97.6 billion in the third quarter. Sales did slow in January, up only 1.8%, with U.S. results dragged down by international sales depressed by a stronger dollar. But U.S. comparable-store sales, excluding gasoline, rose 2.1%, a number exceeded only by a handful of retailers, such as club chains Costco and BJ's.
The belt-tightening marks one of the first moves by Mr. Duke since he succeeded Lee Scott as CEO on Feb. 1.
News of the layoffs was first reported by Northwest Arkansas media yesterday, based on reports from Chamber of Commerce executives and an e-mail that circulated from Mr. Duke before Walmart commented. The company never issued a formal statement on the layoffs.
In a statement yesterday, union-backed Walmart Watch wasted no time attacking the company for laying off employees despite its seeming prosperity. The group said it was "saddened by the news," adding that "at the same time, the Walton Family is worth over $100 billion, and former CEO Lee Scott left his post with a reported net worth of $200 million. We would have hoped that during this tough time, the company would have used some of that wealth to reinvest in its work force."