Retail News Breaks Archives
Samís Club to lay off 2,300 employees
January 27th, 2014
BENTONVILLE, Ark. – Walmart has joined the growing ranks of American retailers who have decided to slash their workforces in the wake of a less-than-stellar holiday season.
The company has announced that approximately 2,300 workers, including hourly employees and salaried assistant managers, will be let go.
A Sam’s Club spokesman explained the cuts to the New York Times as an effort by the chain to balance its resources. "We realized we had pretty much the same club structure whether a club had $50 million in revenue or $100 million in revenue," he said.
The layoffs, which work out to about four positions per club chainwide, make up almost 2% of Sam’s employee base of 116,000. Affected employees will have 60 days to find other jobs within Walmart, and those who are unsuccessful will be eligible for severance. Sam’s Club plans to open 15 new clubs during the current 2015 fiscal year.
Walmart has not released its fourth quarter financial report, so its performance, and that of Sam’s Club, is unknown. However, total sales at Sam’s Club for the third quarter, which ended October 31, 2013, grew just 1.1%, as did comparable-store sales excluding fuel. Comp-store sales at the Walmart U.S. division edged downward 0.3% during the period.
By contrast, Sam’s Club’s primary competitor, Costco Wholesale Corp., reported a robust 6% increase in net sales for December to $11.53 billion, while comparable-store sales, excluding the impact of gasoline price deflation, rose a solid 5%. Sam’s Club averaged around $91 million in sales per club during fiscal 2013, while Costco’s warehouses averaged $160 million.
Other retailers resorting to job cuts in an effort to burnish their results include J.C. Penney Co., which will close 33 stores and eliminate some 2,000 jobs in its ongoing struggle to restore profitability. Target Corp., which has been dogged by lackluster domestic sales and sharply disappointing results from its new Canadian operation, followed by a major customer data breach during the holidays, announced it will shed 475 jobs at its headquarters and not fill 700 positions that are open worldwide.
Even Macy’s Inc., which has been performing comparatively well recently, announced early this month a series of cost-reduction moves that will result in the layoff of about 2,500 employees. However, the layoffs will be essentially offset by new jobs created in its e-commerce unit and in new stores.