ഡിവിഷനുകളിലുടനീളം ഉന്നത ഉദ്യോഗസ്ഥരെ പോകാൻ വാൾമാർട്ട് ഇന്ത്യ അനുവദിക്കുന്നു – ഇക്കണോമിക് ടൈംസ്
- Layoffs of more than 100 executives include V-Ps across sourcing, agri-business and the FMCG divisions.
- Profit has eluded Walmart in India with tepid sales growth more than a decade after entering the country.
- Walmart sees no future in its brick-and mortar cash-and-carry business in the country and the downsizing is either a precursor to selling it or consolidating operations with Flipkart.
Mumbai | New Delhi: Loss-laden
India is in turmoil as the world’s largest retailer is in the process of sacking about a third of its top executives based at local headquarters in
, according to people aware of the development.
Walmart announced the layoffs of more than 100 senior executives including vice presidents across sourcing, agri-business and the fast-moving consumer goods (FMCG) divisions at a townhall on Friday. It also plans to shut the Mumbai fulfilment centre, its largest warehouse, and halt new-store expansion in India.
Profit has eluded Walmart in India with tepid sales growth more than a decade after entering the country. The real estate team responsible for new store locations has been disbanded, according to the people mentioned above.
Walmart India didn’t comment on the number of people laid off or store plans but said it remains committed to growing in India. “We are always looking for ways to operate more effectively to serve our members. This requires us to review our corporate structure to ensure that we are organised in the right way to best meet the needs of our members,” a Walmart India spokesperson said. “Impacted associates have been offered enhanced severance benefits and outplacement services to support their transition.”
More people will probably have to leave later in the year. “This is the first phase of layoffs and we expect the next round by April,” said one of the persons cited above.
Three persons aware of the development said Walmart sees no future in its brick-and mortar cash-and-carry business in the country and the downsizing is either a precursor to selling it or consolidating operations with
But Walmart, which acquired ecommerce marketplace Flipkart in 2018, said it had no plan to exit the wholesale segment. “This is completely baseless and false,” said its spokesperson.
“Walmart remains deeply committed to growing its cash-and-carry business in India and is making deep investment in technology to cater to its members’ need through brick-and-mortar and ecommerce.”
Mandate to Turn Around or Face Scaledown
“The parent company has given a mandate to either turn around the business or face a massive scaledown,” said another person aware of Walmart’s plans.
Walmart India’s Best Price stores had accumulated losses of Rs 2,180.8 crore until March 2019. In the last fiscal year, Walmart India posted sales of Rs 4,095 crore and a net loss of Rs 171.6 crore. Rival Metro, which entered India in 2003, is the market leader in the segment with 27 stores and revenue in excess of Rs 6,500 crore.
had held discussions on buying Walmart’s wholesale business but found it unviable in the current form.
The cash-and-carry business involves wholesale sales to small neighbourhood stores, hotels and catering firms. The world’s largest retailer acquired Flipkart for $16 billion in 2018 to gain access to India’s $670 billion retail market.
Walmart’s cutback comes as Flipkart has announced its entry into food retail in India. Flipkart FarmerMart will sell locally produced items online and can also sell through physical stores later. India allows 100%
(FDI) in food retail for locally manufactured items. Food is the only segment in which etailers are allowed to sell directly to consumers. The government has asked ecommerce firms to keep food-only retailing ventures at arm’s length from flagship marketplaces by maintaining separate boards, staff, bank accounts and inventories.
“While they will have to figure out synergies and efficiencies between both companies, they will have to keep the regulatory framework in mind. There will be overlap and commonality which will be merged over time,” said Devangshu Dutta, chief executive officer at consultancy firm Third Eyesight. “Walmart still has a small presence in India which is a nascent market but will keep growing for several decades.”
Walmart entered India in 2007. It partnered with the Bharti Group in the wholesale business, then bought out its partner’s 50% stake. It terminated franchise and supply agreements related to Bharti’s retail business in 2013. Walmart’s store expansion was put on hold between 2012 and early 2015 amid an internal probe to check if its local unit had in any way violated the US
that penalises American companies for bribery and other such wrongdoing overseas.
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