- Walmart India lays off 56 staff in Gurugram in revamping drive that will see it intensify focus on wholesale customers.
Walmart Inc., the world’s largest retailer, is relooking at its Indian brick-and-mortar business, primarily the performance of its cash-and-carry Best Price format.
Walmart India said on Monday that it has laid off 56 Staff at its Gurugram corporate office as part of a restructuring exercise that will see it intensify its focus on serving wholesale customers through an omnichannel retail model to make a profit.
“We are also looking for ways to work more effectively, which allows us to evaluate our organizational structure to make sure we’re structured in the right way.
“All of the 56 associates affected — eight in senior management and 48 in middle-to-lower management — have been offered enhanced severance benefits and outplacement services to support their transition,” he added. Retailer exits include executives across the supply chain, distribution, and real estate. Iyer said Walmart has invested heavily in India’s technology along with builder services.
We are therefore investing heavily in technology and have a strong pipeline of Best Price stores. “Walmart’s offline sector cuts come nearly one-and-a-half years after it took a majority stake in India’s largest online retailer Flipkart in an estimated $16 billion transaction. The decision underlines the retailer’s intention to expand its position in India’s online retail market, where it competes fiercely
“India’s physical stores take much longer to break-even for Walmart than they are used to in many other markets,” another person who has worked closely with the company said. “Bentonville (Walmart headquarters) is losing patience, and they want to concentrate on a $16 trillion investment in Flipkart,” he added.
Nevertheless, Walmart remains committed to increasing its cash-and-carry (B2B) business in India, Iyer said. The company launched six new Best Price Modern Wholesale stores and one satisfaction center last year, with revenue rising 22 percent in 2019, Walmart said.
Many future stores may be up for revaluation, another person said, mindful of the plans of the retailer.
Walmart faced several challenges since it entered India in 2007 in partnership with Bharti Enterprises. Subsequently, in 2013, it departed with Bharti and decided to go solo with its cash-and-carry stores.
Walmart, which competes in India with Germany’s METRO Cash and Carry and Siam Makro from Thailand, which runs LOTS of wholesale shops, is still losing. The total income of Walmart’s 28 Best Price stores for the year ended 31 March 2019 was about 4,095 crore; while losses were at about 171,68 crores, according to data from Tofler.
METRO is also aiming to nearly double its store count in India over the next few years, said Arvind Mediratta, President and CEO of METRO. He added that over the years, the involvement of a strong sales team and focus programs designed to digitize and digitize small mom and pop stores on-board have helped the company scale business and advance rivals.
