Supplier Pitch Rooms Used to Eliminate Walmart Executives

“After months of evaluation, we’ve concluded there is an opportunity to better position our Home Office teams to move with speed and purpose,” CEO Doug McMillon wrote in a memo sent Friday to staff. The company is at “an important time in our history,” he added. “This in part means pulling back in some areas and investing in others.”

The reductions include some managers and vice presidents. A Wal-Mart spokesman declined to detail what departments or types of employees are being eliminated. Broadly the goal of the layoffs is to align “the staff in the home office with the corporate priorities,” mainly growing e-commerce sales and improving the overall experience of shopping in U.S. stores, said the spokesman. Laid off employees will receive 60 days of pay, plus two weeks of pay for every year of employment with the company, he said.

In August the retailer reported a 15% drop in quarterly net profit from the previous year and cut its earnings outlook for the full year. The Wall Street Journal had reported this week that Wal-Mart was preparing a round of layoffs at its headquarters.

Other U.S. retailers have moved this year to cut corporate jobs or close stores as they confront slow sales growth and a shift to Web shopping. Rival Target Corp. this year has laid off more than 2,700 corporate jobs in Minneapolis and India as part of CEO Brian Cornell’s plan to eliminate more than $2 billion in costs by the end of next year. And large consumer goods companies that sell their wares at Wal-Mart and other retailers are facing similar challenges. Earlier this week, ConAgra Foods Inc. said it would cut 1,500 office jobs.

Rumors of layoffs have for months preoccupied the community in northwest Arkansas where Wal-Mart employs 18,600 and has created an ecosystem of companies that sell their products on Wal-Mart shelves. Nearly every part of the local economy, including the real-estate market and donations to charities, is linked to the world’s largest retailer.

Some Wal-Mart department directors had been told to cancel travel this week or make sure they came to the office Friday, said a person who spoke with the Wal-Mart employees. Wal-Mart human resources employees also reserved many of the meeting rooms at the headquarters as well as small rooms typically used by suppliers to pitch products to the retail giant, according to another person familiar with the matter.

Rosalind Brewer, the CEO of Sam’s Club, Wal-Mart’s warehouse retailer also sent a memo Friday to staff outlining new priorities for the retailer and a staff reshuffle, according to an email viewed by The Wall Street Journal. Sam’s will focus on growing business with “higher household-income members” and eight consumer groups like large families and new moms and convenience store owners, said Ms. Brewer in the memo. Almost a dozen executives will be shuffled into positions to focus the business on these groups as well as growing sales of Sam’s own brands. “We intend to build fewer, much stronger private label brands,” said Ms. Brewer. Sam’s Club accounts for about 12% of Wal-Mart’s nearly half a trillion dollars in annual revenue.

Wal-Mart is facing strong competition from other retailers, online and offline. At the same time, the company’s store sales have suffered in recent years because shoppers too often found items out of stock and complained of messy stores and unfriendly service. Wal-Mart is investing heavily in making stores clean, fast, friendly and well-stocked, executives said in presentations to investors and reporters this summer. At the same time, the retailer is investing in boosting its e-commerce infrastructure and raising wages for store employees. In April the company raised the minimum wage it pays store employees to $9 and will raise that to $10 for most in February.

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Write to Sarah Nassauer at sarah.nassauer@wsj.com