NEW DELHI: Walmart Inc, the world’s largest retailer, has fired 56 of its executives in India as it restructures in the country.
The move underscores the challenges Walmart has faced in expanding its wholesale business in India. The company currently operates 28 wholesale stores in the Asian country where it sells goods to small shopkeepers, and not to retail consumers.
Reuters reported the firings earlier on Monday, citing three people with direct knowledge of the matter, adding the move had mostly affected executives in Walmart’s real estate division, which takes care of store expansion, as the wholesale business model did not bring in expected growth.
Eight of the 56 executives fired were in “senior management” roles and the rest from middle or lower management, Krish Iyer, President and CEO of Walmart India, said in a statement.
“We are also looking for ways to operate more efficiently, which requires us to review our corporate structure to ensure that we are organised in the right way, ” Krish said, adding that the fired executives had been offered enhanced severance benefits.
Walmart has placed bold bets on India’s e-commerce sector. In 2018, it paid US$16bil to buy a majority stake in India’s online marketplace Flipkart, in its biggest global acquisition.
“It’s happening because focus is shifting to e-commerce rather than physical (stores), ” according to one of three people, who spoke to Reuters ahead of the company announcement. A second source said Walmart could slow down the pace of opening new wholesale stores in India, as it focuses on boosting sales through business-to-business and retail e-commerce.
Krish, however, said Walmart remained committed to developing physical stores as well.
“We have recently made significant investments to serve our members. This includes investments in our brick-and-mortar stores as well as e-commerce.” — Reuters