The Indian arm of Walmart Inc could be in for some serious downsizing in the days to come as news emerges of the company parting ways with 56 of its employees at the Gurugram headquarters. Many among those who were laid off are of the Vice President level, though the list includes employees at other lower levels as well. The pruning is being done across functions and verticals as well, including from the sourcing, agri-business and the fast-moving consumer goods (FMCG) divisions.
According to a statement from the company, this is part of a corporate restructuring.
"As part of this review, we have let go 56 of our associates across levels at the corporate office. All of the 56 impacted associates (8 in the senior management and 48 in the middle/lower management) have been offered enhanced severance benefits and outplacement services to support their transition," Krish Iyer, President & CEO, Walmart India, said in a statement.
However, the company denied any more layoffs. There were reports that there could be a second round of layoffs in April.
Walmart has been active in India much before it acquired Flipkart in a $16 million deal. The foray was made in 2007 in the form of an association with Bharti Airtel where it setup a cash and carry business. Walmart later acquired Bharti Airtelâ€™s stake and has been running the business as a 100% owned entity and there are brick and mortar stores operated by the US retail giant. The products are directly purchased from farmers and supplied to bulk buyers like retail outlets, hotels and restaurants and catering companies.
Walmart has seen this business returning consistent losses and the parent company is understood to have issued warnings that if the Indian operations cannot turn profitable, then it should be considerably scaled down. This process of reducing the manpower could be a precursor to further steps being initiated to shrink the size of the operations. As part of these steps, a report on this suggests Walmart is closing down its fulfilment centre in Mumbai and all activities on future expansion of stores etc. have been suspended.
There were even moves to sell off the entity and the Tata Group was one of the entities to have evinced interest. Subsequently, however, the Tatas backed off.
From the financial perspective, Walmart India posted sales of Rs 4,095 crore and a net loss of Rs 171.6 crore. The accumulated losses amount to over Rs 2,181 crore.
Walmart may be thinking on the lines of aligning many of its activities in India with the ecommerce marketplace Flipkart. There are issues however, based on how much the FDI rules will permit the company to be handling its operations with the retail arm.
Things are definitely not so rosy at Walmart India and the coming days my reveal the plans the company has for its Indian wholesale business. Officially the company seems to be holding on to the position that it remains very much invested in the market and will continue to be active.
With IANS inputs