Wal-Mart cutting 11,200 jobs at Sam's Club

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    Jan 25, 2010 10:09 AM GMT
    The Associated Press
    updated 6:42 p.m. CT, Sun., Jan. 24, 2010

    NEW YORK - Wal-Mart Stores Inc. will cut about 11,200 jobs at Sam's Club warehouses as it turns over the task of in-store product demonstrations to an outside marketing company.

    The move is an effort to improve sales at Sam's Club, which has underperformed the company's namesake stores in the U.S. and abroad.

    The cuts represent about 10 percent of the warehouse club operator's 110,000 staffers across its 600 stores. That includes 10,000 workers, mostly part-timers, who offer food samples and showcase products to customers. The company also eliminated 1,200 workers who recruit new members.

    Employees were told the news at mandatory meetings on Sunday morning.

    "In the club channel, demo sampling events are a very important part of the experience," said Sam's Club CEO Brian Cornell in a phone interview with The Associated Press. "Shopper Events specializes in this area and they can take our sampling program to the next level."

    Shopper Events, based in Rogers, Ark., currently works with Wal-Mart's namesake stores on in-store demonstrations. Sam's Club is looking to the company to improve sampling in areas such as electronics, personal wellness products and food items to entice shoppers to spend more.

    Cornell has been working to boost Sam's Club's results since taking the helm in early 2009, introducing new store formats, price cuts and offering more variety and more brands of items from take-home meals to baked goods.

    As consumers eat out less in the shaky economy, Sam's Club has tried to steal customers from grocery chains and rival warehouse stores like Costco Wholesale Corp. by offering more everyday goods like food and health and beauty items and paring its assortment of general merchandise like furniture and clothes.

    But during Wal-Mart Stores' most recent quarter, revenue at the Sam's Club division slipped nearly 1 percent to $11.55 billion while U.S. Walmart stores posted a 1.2 percent sales increase to $61.81 billion. Earlier this month, Wal-Mart Stores closed 10 underperforming Sam's Club locations, resulting in the loss of about 1,500 jobs.

    "Sam's has been the relative laggard, and it has lagged relative to its direct competitors, Costco and the smaller BJ's (Wholesale Club)," said Craig Johnson, president of retail consultancy Customer Growth Partners.

    The move to outsource its food sampling efforts is a way for the company to tout its fresh food offerings in a cost-effective manner, Johnson said.

    "'Fresh' is where the real competitive battles are being fought in the club sector," he said.

    Shopper Events will launch a new demo program called "Tastes and Tips" with new carts, signs, uniforms and a trained team, said Cornell. He said the move was not made to save money.

    "It's not a cost cutting measure, its really an investment in enhancing our demo program," he said. Cornell added that Shopper Events plans to hire "roughly the same number of people" cut, and said Sam's Club workers are invited to apply for those positions.

    Cornell said Sam's Club decided to eliminate its membership recruiting unit because "we have found that we can more effectively drive membership through targeted member acquisition events and by increasing our partner membership programs."

    "I feel betrayed," said Sally Grueling, 56, who had worked at Sam's Club for nine years, most recently in Hilliard, Ohio as a new business membership rep.

    In a memo to employees, Cornell said eligible workers will receive severance pay and benefits, and that the company will help them find opportunities at other Sam's Clubs and in Walmart stores, in addition to Shopper Events positions.

    The cuts come as many Americans had hoped job losses would be slowing as the economy slowly recovers. However, analysts said Sunday that while this marks Wal-Mart Stores' largest job cut, they expect many employees to be picked up by Shopper Events, so the net effect on the economy probably won't be that bad.

    "I would argue that from an economic standpoint it's somewhat nominal," said David Strasser, a retail analyst with Janney Montgomery Scott. "It looks a lot worse than it really is from a layoff standpoint. My read is the majority of employees are going to be picked up by Shopper Events."

    Strasser said he did not expect the move to materially affect Wal-Mart Stores' fourth-quarter earnings results. Wal-Mart reports results for the quarter and full year in February.

    "It really should be neutral to the economy," Johnson agreed. He said Wal-Mart remains the largest private employer in the world and in the U.S. "None of that changes."

    The number of jobs created via Shopper Events may not be one-to-one, he said, "but should be fairly close. Net net I don't think it makes a huge difference on the economy."




  • roadbikeRob

    Posts: 14395

    Jan 27, 2010 9:48 PM GMT
    As far as I am concerned, Wal Mart could go under the same way that other stores did when Wal Mart came into town with their predatory style business practices of under cutting all the competition. You will never catch me in a Wal Mart. I will gladly do without rather than caving into Wal Mart's always low prices bullshit. icon_mad.gif
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    Jan 27, 2010 10:01 PM GMT
    Die Wal*Mart, die... icon_twisted.gif
  • roadbikeRob

    Posts: 14395

    Jan 27, 2010 10:10 PM GMT
    Red Vespa, I second that, die Wal Mart die. That horrible behemoth junk store has destroyed numerous business districts and shopping malls throughout the US with its predatory always low prices bullshit. Finally something you and I can agree on.
  • skininethousa...

    Posts: 181

    Jan 27, 2010 10:13 PM GMT
    I see no problem with this. The company that is taking over allows the people who have been working in these positions to apply for a job with the new company.
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    Jan 27, 2010 10:36 PM GMT
    The most bleak ideal in this is that the jobs will be absorbed by the marketing company and "It really should be neutral to the economy".

    I suppose when it comes to the top guns in bigger cooperations it's all dollars n cents...

  • drypin

    Posts: 1798

    Jan 28, 2010 3:34 PM GMT
    I think we need to hear from all those Real Jock members who work at Sam's Club.
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    Jan 28, 2010 4:32 PM GMT
    In regards to wanting Walmart to die, or that it destroyed business districts... I think the real problem is not Walmart but the consumer. Both Canada and the US have vast numbers of minimum wage workers. They can survive by shopping at Walmart. What I see, though, are many people pulling up in their 80,000 dollar vehicles and shopping there.

    THAT, I think, is what's destroying other businesses.

    That 10 dollar bill in a wealthy person's pocket is 100 dollars to someone on minimum wage.

    -Doug
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    Jan 28, 2010 4:39 PM GMT
    Again, MenInLove has the most reasoned answer.
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    Jan 28, 2010 4:48 PM GMT
    I fucking hate Wally World and their predatory actions. I do get my rocks off by laughing so loud at www.peopleofwalmart.com icon_lol.gif
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    Jan 28, 2010 4:58 PM GMT
    roadbikeRob saidFinally something you and I can agree on.

    And I am glad to hear this! icon_biggrin.gif

    I think we've crossed swords about political issues? I get WAY too emotional about political things. But among the strengths and the shortcomings of the Internet for me is that I respond to the WORDS I see, not the people behind them. And so I often don't even remember the screen name of guys I debate online.

    I attack the words, but I forget that in so doing I also attack the person who wrote them. In my mind it is very clinical & remote, as if I'm critiquing something written by a dead author from 200 years ago.

    But you are real, and I do seem to remember I've gone for the jugular with you more than once. Well, my bad manners. Not that I amend a word of what I previously said, that I can't remember at all, but I have a sense that we've had some battle-royals.

    Your good grace in saying we've found a ground for common agreement is the mark of a gentleman, and now I have to do my best to remember your screen name, and behave more civilized in my replies to you in the future. Not that I promise to agree with you in the least, but a little more courtesy on my part would be called for, I think.
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    Jan 28, 2010 5:03 PM GMT
    roadbikeRob saidAs far as I am concerned, Wal Mart could go under the same way that other stores did when Wal Mart came into town with their predatory style business practices of under cutting all the competition. You will never catch me in a Wal Mart. I will gladly do without rather than caving into Wal Mart's always low prices bullshit. icon_mad.gif


    This is how I feel - - - - and have always felt about this chain. When you remember how they treat employees - making them clock out and come back in to do clean up jobs............or how they've treated women............it is just too much. Think how filthy rich the Walton family is - - - all of them - - - and then they treat their employees so miserly. No excuse for this kind of business - and no excuse for any thinking person to shop there. The lower wage consumer can just as easily find good bargains at other stores, thus maintaining a reasonable budget. Give your business to smaller proprietors who deserve your patronage!
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    Jan 28, 2010 5:05 PM GMT
    lchg5265 saidI see no problem with this. The company that is taking over allows the people who have been working in these positions to apply for a job with the new company.
    More than likely they won't get rehired, or won't accept, because the pay will be lower.
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    Jan 29, 2010 5:28 AM GMT
    Jockbod48, In Canada Walmart can't do any of what you describe. They start at about $8.10 an hour with benefits. Our labour laws are pretty tight.

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    Jan 29, 2010 6:02 AM GMT
    Business are in business to provide a service or product desired by the customer at a price they are willing to pay. What do you do when a business starts to compete with you and it is impossible for your to ever compete on their level? You differentiate and diversify. You find or create a niche and serve that market so that you AREN'T in direct competition with Wal-Mart.

    Wal-Mart sells a LOT of goods of relatively low quality for low prices. If you obviously cannot obtain the same prices from suppliers because you are a low volume buyer then you need to get into a different business. In that dimension, the mom and pop shops failed to do business the right way.

    I do agree though that Wal-Mart does have a lot of very questionable and flat-out immoral practices (such as taking out life insurance policies on high-risk employees naming themselves as beneficiaries). But like meninlove said, the consumer is the biggest problem.
  • t0theheights

    Posts: 428

    Jan 29, 2010 6:27 AM GMT
    txguy1605 saidBusiness are in business to provide a service or product desired by the customer at a price they are willing to pay. What do you do when a business starts to compete with you and it is impossible for your to ever compete on their level? You differentiate and diversify. You find or create a niche and serve that market so that you AREN'T in direct competition with Wal-Mart.

    Wal-Mart sells a LOT of goods of relatively low quality for low prices. If you obviously cannot obtain the same prices from suppliers because you are a low volume buyer then you need to get into a different business. In that dimension, the mom and pop shops failed to do business the right way.

    I do agree though that Wal-Mart does have a lot of very questionable and flat-out immoral practices (such as taking out life insurance policies on high-risk employees naming themselves as beneficiaries). But like meninlove said, the consumer is the biggest problem.


    There's some truth to this, but ultimately Walmart's actions still aren't fair to the "mom and pop" shops -- nor are they good for the local economy. And yes, the consumers are partly to blame for choosing to shop Wallyworld over their local shops, just to save a few pennies.

    The solution here is of course tight regulation and simply keeping Walmart out to protect smaller businesses. You will likely never see a Walmart or Target in SF; the city even fought very hard to keep Costco and Best Buy out for a while -- all for the reason of protecting local businesses. I'm all for banning Walmart and similar "superstores" wherever and whenever possible, as well as passing laws that force them to treat their employees and their competitors fairly wherever they do exist.

    Perhaps this is partly why SF is such a great city to live in: Relatively strong local economy, and few people wearing hideously cheap clothing. icon_smile.gif
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    Jan 29, 2010 8:26 AM GMT
    t0theheights said
    txguy1605 saidBusiness are in business to provide a service or product desired by the customer at a price they are willing to pay. What do you do when a business starts to compete with you and it is impossible for your to ever compete on their level? You differentiate and diversify. You find or create a niche and serve that market so that you AREN'T in direct competition with Wal-Mart.

    Wal-Mart sells a LOT of goods of relatively low quality for low prices. If you obviously cannot obtain the same prices from suppliers because you are a low volume buyer then you need to get into a different business. In that dimension, the mom and pop shops failed to do business the right way.

    I do agree though that Wal-Mart does have a lot of very questionable and flat-out immoral practices (such as taking out life insurance policies on high-risk employees naming themselves as beneficiaries). But like meninlove said, the consumer is the biggest problem.


    There's some truth to this, but ultimately Walmart's actions still aren't fair to the "mom and pop" shops -- nor are they good for the local economy. And yes, the consumers are partly to blame for choosing to shop Wallyworld over their local shops, just to save a few pennies.

    The solution here is of course tight regulation and simply keeping Walmart out to protect smaller businesses. You will likely never see a Walmart or Target in SF; the city even fought very hard to keep Costco and Best Buy out for a while -- all for the reason of protecting local businesses. I'm all for banning Walmart and similar "superstores" wherever and whenever possible, as well as passing laws that force them to treat their employees and their competitors fairly wherever they do exist.

    Perhaps this is partly why SF is such a great city to live in: Relatively strong local economy, and few people wearing hideously cheap clothing. icon_smile.gif


    I'm gonna have to disagree on the reason you state for the few people wearing hideously cheap clothing. Perhaps it has more to do with the high level of gayness found there =P

    But you're right, I mentioned they engage in many questionable practices that can be considered "unfair" for the mom and pop shops such as pricing certain product lines at unprofitable levels (which Wal-Mart can afford to do) for some time to drive competitors out, pressuring suppliers to consistently lower their costs, misrepresenting their economic impact on communities to their local governments to obtain favorable tax rates (Wal-Mart employees on average use twice as much social welfare funds as employees of other big-box retailers, somewhere in the neighborhood of $2,000). Not to mention their negative environmental impact with their billions of dollars worth of merchandise in production overseas and on trucks/boats ALL the time.

    You do have to commend their genius in distribution though.
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    Jan 29, 2010 8:44 AM GMT
    Red_Vespa saidDie Wal*Mart, die... icon_twisted.gif


    I freaking hate Wal-mart. I hope it shuts down and goes under, yes I feel sorry or the employees getting but they treat their employees like shit. My friend works for Wal-mart and all she tells me is horror stories, yet I DON'T KNOW WHY SHE DOESN'T QUIT.

    Also if anyone is curious google "dead peasants act walmart"
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    Jan 29, 2010 1:27 PM GMT
    Walmart would likely be a non-issue if there were *coughs* stricter labour laws in place down there. Interestingly, the same businesses that complain about Walmart don't want tighter labour laws.

    As well, there are a great many impoverished people in the US and your economy is in the tank right now. I'm pretty sure none of you want to see welfare money increased to accommodate shopping at more expensive shops.


    -Doug

    PS An example...up here, anyplace a low income person goes to get a can of Campbell's soup, the healthy choice variety will cost about $2.25 to 2.85 a can.
    At Walmart the cost sits steady at $1.54.

    A block of cheese without rennet in it, 750 grams is about $18.00 anywhere else. It is 11.99 at Walmart and often on sale for 7.99. Same brand.

    If you're household income is average, there's no need to shop there.

    Before slapping Walmart too hard, we often tell people to imagine paying $600 a month for renting that bachelor suite, then try to exist on the remaining $100 a week. That 100 a week has to cover your clothing, food, medications, transportation, utility bills etc etc etc.


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    Feb 03, 2010 5:40 PM GMT
    I shop at Wal-mart for a lot of groceries because it bugs me to pay more for the same item at another store. Why should I pay more at another store for the EXACT SAME ITEM? I'm able to buy a lot more groceries for the same amount of money at Wal-mart. And Wal-mart has a policy that they will not be undersold. So, if you find an item advertised less at another store, just bring the ad in and Wal-mart will match the price.
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    Feb 03, 2010 5:46 PM GMT
    mjf89 said
    Red_Vespa saidDie Wal*Mart, die... icon_twisted.gif


    I freaking hate Wal-mart. I hope it shuts down and goes under, yes I feel sorry or the employees getting but they treat their employees like shit. My friend works for Wal-mart and all she tells me is horror stories, yet I DON'T KNOW WHY SHE DOESN'T QUIT.

    Also if anyone is curious google "dead peasants act walmart"


    I'm sure she doesn't quit because it's not easy to get another job. And if she wants to give her job up, I know of some friends who will gladly take it. They have been unemployed for almost a year now and are getting desparate and will do anything.