The largest retailer in the world, Wal-Mart Stores Inc., revealed that 30 of its senior executives in China were dismissed due to a major restructuring in Asia. The reorganization changes include store closures on the territory of Japan and management shifts in India.
The companys spokesman in China, Ray Bracy, said in an e-mailed reply to questions, cited by the Financial Times: “We have reached mutual agreements for them to leave the business. “We’ve been streamlining the business, reducing complexity. This is more of the same… It’s consistent with all of the things we have done in the past.”
According to the explanation provided by Mr. Bracy, the lay-offs include two senior-level directors. The rest of the executives come mainly from mid-level management. Mr. Bracy, however, refused to provide reporters with more details about the lay-offs.
The decision of Wal-Mart to cut the executives comes at a moment when the company is going through a serious management restructuring in its domestic market. The departure of the retailers merchandising head in the U.S. was announced only a couple of days ago. In addition, Scott Price was reappointed as Chief of Wal-Marts operations on the territory of Asia in November, as the company has been dealing with some issues in its largest markets in the region.
Wal-Mart has also made changes in its supplier network as part of the reorganization it is carrying out. The number of its Chinese pork suppliers was reduced by the company from several hundred to several dozen in an attempt to boost the efficiency of the entire distribution system and make quality control even tighter.
The U.S.-based retailer has faced declining sales in China because of the fierce rivalry and lower consumer demand. The company reported a 0.8% drop in its China sales during the third fiscal quarter.
Wal-Mart Stores Inc. was up 0.04% to close at $84.98 per share yesterday, marking a one-year increase of 5.33%. The company is valued at $273.85 billion. The companys shares traded at €68.110 in Frankfurt as of 13:15 GMT. According to CNN Money, the 23 analysts offering 12-month price forecasts for Wal-Mart Stores Inc. have a median target of $84.00, with a high estimate of $92.00 and a low estimate of $66.00. The median estimate represents a -1.15% decrease from the last price of $84.98.
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