Wal-Mart staffing shakeup to align store, digital operations

Dive Brief:

  • Jet founder Marc Lore, now president and CEO of Wal-Mart’s e-commerce, and Doug McMillon, Wal-Mart's president and CEO, each sent Wal-Mart employees a memo on Friday, CNBC reports, explaining that leadership changes at the company will help bring together its stores and online leadership roles. 
  • Wal-mart has also purchased a subscription to Workday’s human resources management software systems, according to a filing from Workday to the Securities and Exchange Commission dated Jan. 11. The purchase comes on the heels of a reported plan to cut some 1,000 jobs in its corporate offices by the end of this month. Wal-Mart spokesperson Randy Hargrove told Retail Dive the company hadn't made any announcements about job cuts but continually looks “at our corporate structure." “Like any organization, we make decisions based upon what’s best for our business and the customers we serve,” he said. 
  • On Tuesday the company also said it will add some 10,000 retail jobs created through the opening of 59 new, expanded and relocated Wal-mart and Sam’s Club facilities as well as e-commerce services. The company estimates 24,000 construction jobs will be supported through the opening of those facilities.

Dive Insight:

Amid news of significant shakeups in its corporate offices and store back rooms in recent months, Wal-Mart is touting employment figures that will have the company adding store associates, e-commerce fulfillment workers and boost training of store personnel, all as part of the company's effort to better serve customers, according to a company blog post.

As Wal-Mart sorts out which jobs to cut and which to create, Amazon meanwhile has announced it will add some 100,000 full-time, full-benefit jobs in Texas, California, Florida, New Jersey and other states over the next 18 months. KeyBanc analyst Ed Yruma said last week that a "significant and unexplained gap” in Amazon's hiring numbers indicates that its need for more workers may mean it plans to further expand its physical stores. If so, that could mean that Amazon's competitive pressure on Wal-Mart to boost e-commerce may soon extend to brick and mortar.

Another internal memo from CEO Doug McMillon obtained by news outlets last week told company staffers that chief information officer Karenann Terrell, who oversaw the largest segments of the global Walmart Technology portfolio including Information Systems Division, Global Back Office Solutions and Data and Analytics, will step down on Feb. 24.  While a Wal-Mart spokesperson told Retail Dive last week that Terrell’s departure has nothing to do with Wal-Mart’s $3.3 billion acquisition of Jet last year, the retail giant does appear to be re-aligning its digital teams since that purchase.

Lore has replaced Wal-Mart e-commerce chief Neil Ashe, and several more e-commerce executives announced their departures in recent months, part of Wal-Mart's overall $11 billion in capital spending toward boosting online sales while drastically slowing down the number of new physical stores the company opens. Wal-Mart has also taken significant steps to streamline its worker base: Last year the company eliminating about 7,000 accounting and invoicing positions in an effort to shift employees from the back office into roles that emphasize direct interaction with shoppers. 

The shakeups, which have been expected, suggest that the retailer is willing to undo much of the work in its existing e-commerce operations in favor of Jet’s pricing and fulfillment algorithms. While experts first questioned how long Jet co-founder Lore might last at Wal-Mart, considering that he bailed on Amazon three years after the e-commerce giant bought his first web retail effort, Quidsi, Wal-Mart has reportedly incentivized Lore to stick around for at least five years, to the tune of as much as $1 billion.

Columbia University business school retail studies professor Mark Cohen told Retail Dive last summer that the Jet deal would create a culture clash that would end in Wal-Mart e-commerce executives departing. But he’s among the observers skeptical of what else the acquisition will do for Wal-Mart.

“You can’t acquire things in the name of growth without knowing or understanding how to rationalize it,” Cohen said. “You can’t buy growth. You can buy elements that will improve your capacity to grow, like for instance Apple’s list of modest acquisitions over the years. These 'Hail Mary passes' typically fail because you can’t just bolt a company onto your back and describe it as 'creative.'"

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Filed Under: Corporate News