New Delhi: Walmart India is letting go of 56 of its employees as part of a restructuring exercise. The company that operates 28 cash-and-carry stores here will lay off senior and mid-level employees at its corporate office in Gurgaon as it intensifies focus on serving customers through an omni-channel model.
“We are also looking for ways to operate more efficiently, which requires us to review our corporate structure to ensure that we are organized in the right way. As part of this review, we have let go 56 of our associates across levels at the corporate office," Krish Iyer, president and CEO, Walmart India said in a statement on Monday. “All of the 56 impacted associates--eight in the senior management and forty eight in the middle-to-lower management have been offered enhanced severance benefits and outplacement services to support their transition."
Iyer added that Walmart, which first entered India in 2007, has been investing heavily in technology in India along with building more stores.
“We have recently made significant investments to serve our members better and will continue to do so. This includes investments in our brick and mortar stores as well as e-commerce. Our members are increasingly becoming omni-channel shoppers. We are thus investing heavily in technology and have a healthy pipeline of Best Price stores," Iyer said.
The layoffs were first reported by The Economic Times newspaper on Monday.
Exits include senior executives at the retailer’s sourcing, agri-business and the fast-moving consumer goods (FMCG) divisions at its head office in Gurgoan, the ET report said. The announcements were made at a town hall on Friday.
Walmart, the world’s biggest retailer, however, dismissed reports of another round of layoffs, calling it “baseless and incorrect".
Layoffs at Walmart’s brick and mortar business come after it bought a majority stake in e-commerce retailer Flipkart in 2018 in an estimated $16 billion deal, emphasizing the retailer’s plans to cement its position in the country’s online retail market where it now competes fiercely with rival Amazon.
Walmart remains committed to growing its business-to-business cash and carry business in India, Iyer said.
The company opened six new Best Price Modern Wholesale stores, one fulfilment center, with sales growing 22% in 2019, Walmart added in the statement.
Walmart’s struggles to scale business in India follow stringent foreign direct investment policies in the country that govern the entry of multi-brand retailers in India.
Foreign cash and carry or wholesale businesses, on the other hand, are allowed to wholly own and operate such stores in India. As a result, Walmart invested in B2B retail in the country after the retailer faced resistance in setting up its signature front-end stores here as Indian law restricts the entry of foreign multi-brand stores in order to protect the interests of scores of small shopkeepers that form the backbone of the country’s retail trade.
Walmart India is a wholly owned subsidiary of Walmart Inc., and runs 28 Best Price Modern Wholesale stores in the country. The retailer first entered India through a partnership with Bharti Enterprises for a cash-and-carry business that allows small businesses, mom-pop stores, and hotels to buy directly in bulk from its large stores. In 2013, the two parted ways, with Walmart building the cash-carry business in India on its own.