Wal-Mart began laying off some 200 e-commerce workers at its Silicon Valley operations in California on Tuesday, The Wall Street Journal reports. A request for comment from Retail Dive to Wal-Mart was not immediately returned.
Wal-Mart e-commerce chief Marc Lore, also founder and CEO of e-commerce startup Jet (which the retail giant acquired for $3.3 billion last year), said the company is "focused on adding the right talent to our team and making sure we're investing in ways that directly improve our customer experience,” according to a staff memo obtained by the Journal.
The layoffs are part of an ongoing shuffle in teams to orient staff to more customer-facing jobs, spokesperson Dan Toporek told the Journal, though analysts have told Retail Dive that Wal-Mart’s digital teams were likely to leave or be let go as Lore institutes his operations.
Wal-Mart contends the company doesn’t “need as many senior people,” according to Toporek, who also said that some of the layoffs were performance related, according to the Journal’s account. But the shakeup in the retailer’s digital teams is also likely the result of an inevitable culture clash after its acquisition of Jet, Columbia University business school retail studies professor Mark Cohen told Retail Dive last summer.
“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.'"
That shakeup has been significant so far. Lore replaced Wal-Mart e-commerce chief Neil Ashe last year, and several other e-commerce executives have since announced their departures, which is part of Wal-Mart's overall $11 billion plan to boost online sales while drastically slowing down the construction of new physical stores. Executives who are leaving or have already left include: Walmart.com chief Fernando Madeira (who took his position two years ago after leading the company’s Latin American e-commerce operations), Senior Vice President of E-Commerce Supply Chain Brent Beabout (replaced by Jet co-founder Nate Faust, who’s in charge of fulfillment for Jet and Walmart.com) and Senior Vice President of Global E-Commerce Human Resources Dianne Mills.
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 also step down on Feb. 24. After the announcement, a Wal-Mart spokesperson told Retail Dive that Terrell’s departure has nothing to do with Wal-Mart’s acquisition of Jet last year. Lore and Doug McMillon, Wal-Mart's president and CEO, each sent Wal-Mart employees a memo earlier this month explaining that leadership changes at the company will help bring together its stores and online leadership roles.