Retail giant Wal-Mart Stores Inc. (WMT) plans to cut about 11,200 jobs at its Sam's Club membership warehouse stores in the U.S.
Bentonville, Arkansas-based Wal-Mart said that the majority of the job cuts, or about 10,000, are related to its decision to outsource in-store product demonstrations at Sam's Club stores to Shopper Events LLC, a third-party marketing company based in Rogers, Arkansas, that already manages the "Bright Ideas" in-store demos for Walmart U.S.
"We are now working Shopper Events to develop a demo program unique to Sam's Club, called "Tastes and Tips," that will enhance our existing demo program. The new "Tastes and Tips" demo program will include integrated demo stations, signage, uniforms and product selling," Brian Cornell, President and CEO of Sam's Club Stores, said in the memo to employees that was posted on Wal-Mart's website on Sunday.
"Our demos can be a competitive advantage, and we want to take this member experience to the next level," Cornell added.
The company also said that current employees, who are affected, will have the opportunity to apply for new positions with Shopper Events. Most of the employees are working part-time.
In addition, Wal-Mart plans to eliminate about 1,200 membership recruiting jobs, or about two jobs in each of the more than 600 Sam's Club stores in the U.S.
"We have found that we can more effectively drive membership through targeted Member acquisition events and by increasing our Partner Membership Programs. Current representatives will be able to apply for other open positions within their Clubs," Cornell said.
Wal-Mart said that taking care of all of its associates impacted by both of these changes was one of its most important considerations, and added that it was doing all it can to make the transition as smooth as possible for them.
"In addition to providing severance pay and benefits for eligible Associates, we are working to find opportunities at other Clubs and in Walmart stores, in addition to Shopper Events", the company said.
Earlier in January, Wal-Mart decided to close ten "financially underperforming" Sam's Club locations in the U.S. and lay off about 1,500 workers. The company said that the decision to close the stores was made after reviewing the company's current business performance and as the stores continued to lose money.
WMT closed Friday's regular trading session at $52.94, up $0.02 or 0.04% on a volume of 19.42 million shares.
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