World’s largest retailer Walmart is struggling in the Indian market. While the over $16 billion Flipkart acquisition resulted in some obvious financial drains, the company’s core ‘Walmart’ branded business isn’t having the best of times in India. As a result, the company seems to have put its expansion plans in India on a hold and has reportedly fired about a third of its top executives in India.
According to a report from ET, Walmart has fired more than 100 senior executives including vice presidents across sourcing, agri-business and the fast-moving consumer goods (FMCG) divisions at a townhall on Friday.
In April last year, Walmart had said that it plans to expand its wholesale business, which supplies the local kirana stores with goods, and double the number of wholesale outlets in the next four years. Those plans have now been pulled out, as per the report, although the company said in response to the local daily that that claim was “baseless and false”.
In a statement sent to The Tech Portal, Walmart India president & CEO Krish Iyer stressed on the company’s ‘commitment’ to continue growing the India business. He mentions that the company has opened 6 new Best Price modern wholesale stores, 1 Fulfilment Center and our sales grew 22% in 2019. Iyer added that there are “significant investments” happening at the partner store end, wherein Walmart’s focus is on tech.
On the current layoffs, Iyer said, “We are also looking for ways to operate more efficiently, which requires us to review our corporate structure to ensure that we are organized in the right way. 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. A report appearing in the section of the Press speculating second round of layoffs in April is baseless and incorrect.”
While there are no confirmations, Walmart is also reportedly looking to halt any new-store expansion in India, along with shutting down its Mumbai fulfillment centre, which is its largest warehouse here in India.
It seems likely that the company could potentially scale down the physical business in India or merge it with e-commerce platform Flipkart, which it bought in 2018 for a whopping $16 billion.
The report from ET, citing unnamed sources, claim that more people will have to leave the company in this year as the current layoffs is said to be the first phase and the next phase could happen in April. Iyer, in his statement to The Tech Portal, has termed the same baseless.
Walmart India’s Best Price stores had accumulated losses of ₹2,180.8 crore (~$311 million) until March 2019. In the last fiscal year, the company reported sales of ₹4,095 crore and a net loss of ₹171.6 crore.
We have written to Walmart regarding the same and will update the story upon receiving a response.