Roughly 1000 lay-offs are likely. The company has explained the cuts in with a focus on a long-term reduction in supply chain and logistics costs.
RetailDIVE quotes and comments:
But the dent in its supply chain ranks could undermine one of Wal-Mart’s core strengths: Its highly efficient brick-and-mortar-based distribution system. And it signals that Wal-Mart sees little growth for its brick-and-mortar operations, Nick Egelanian, president of retail development consultants SiteWorks International, told Retail Dive.
"Wal-Mart clearly has decided at the board level that their growth prospects as a brick-and-mortar retailer are over — and when you decide that, you move to cut costs," Egelanian said. "They’re a very low-cost operator to start with. There's probably some excess, but this informs me that they don’t think they’re going to grow, because their core strength is their supply chain.Walmart has also learned that the margin they can make on lower-cost SCM is not a sufficient comparative advantage online. It is not yet crystal clear, but what could also be happening is a swapping out of old-think SCM talent to make way for new-think SCM talent.
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