Bentonville, Ark. based Wal-Mart announced nearly 2,300 Sam’s Club layoffs to take place in the near future. Both hourly and salaried workers will be affected. Assistant managers will represent nearly half of the cuts.
According to ABC News, Sam’s Club currently has 630 stores in the US and Puerto Rico and plans to add at least 15 new stores in the coming fiscal year. Their existing stores generated $56.4 billion in revenue in the last fiscal year and represented 12 percent of parent company Wal-Mart’s $466.1 billion in revenues.
An average store will lose four employees. The cuts will not be uniform, however. According to The New York Times, Sam’s Club spokesman Bill Durling gave this as one of the reasons for the Sam’s Club layoffs:
“We realized we had pretty much the same club structure whether a club had $50 million in revenue or $100 million in revenue. What we’re trying to do is balance our resources.”
The layoff will affect roughly 2 percent of Sam’s Club’s 116,000 employees. According to Durling, affected workers will continue to receive pay for 60 days. They will also be eligible to apply for open positions within Sam’s Club and Wal-Mart. When the 60 days is up, those who have not found new positions will receive a severance. Durling says that Wal-Mart is “trying to treat our associates with utmost care and respect.”
This year’s layoffs represent the largest layoff by Sam’s Club since 2010, when they outsourced their food sampling department and laid off 10,000 workers.
In addition to deep cuts to their assistant management cadre, Sam’s Club will eliminate some positions, such as telephone attendants, entirely. The upcoming cuts and layoffs are part of Sam’s Club’s attempts to run a tighter ship in order to better compete with rivals such as Costco and Amazon Prime.
Durling told the Associated Press: “We felt this was the right move to make sure we are positioning ourselves for growing in the future. We are trying to rebalance our resources in the field to make sure we are investing in the clubs that have the higher growth potential and balancing resources across the chain.”
While the layoffs are bad news for over 2,000 Sam’s Club associates, there is one group of employees who will benefit from the cuts. According to a CNN Money report, Durling suggested that assistant managers who keep their positions and work in departments where other assistant management positions are subject to the Sam’s Club layoffs will be paid more.