The Sam’s Club warehouse segment of Bentonville-based Wal-Mart Stores Inc. laid off about 2,500 employees Friday, an average of about four people from each of its 630 stores, in an effort to “re-balance resources across the fleet,” a spokesman said.
The members-only clubs employ more than 110,000 people in the United States and Puerto Rico at an average of 175 workers per club. Sam’s Club spokesman Bill Durling said all clubs employed roughly the same number of people, regardless of revenue.
The layoffs included hourly and salaried employees, mostly assistant managers.
“We are eliminating a certain number of assistant manager roles while at the same time we’re actually creating these new roles by combining what had been two assistant manager roles into a new supervisor role, a more senior role with a pay increase,” Durling said.
Sam’s Club opened two new stores Thursday and has plans to open 15 clubs in its next fiscal year, which begins next Saturday. New assistant manager roles will be added to some of the larger existing clubs “to help them grow even faster,” Durling said.
The global retail giant’s third-quarter 2014 earnings show Sam’s Club’s net sales, without fuel, were $12.4 billion, up 2.1 percent from the same period in fiscal 2013.
The laid-off employees were notified Friday and will be paid for 60 days.
If they’re not able to find a job within that time period, then they’ll be eligible for severance pay.
“We fully expect to find new roles for a large number in that group; we just don’t know what that’s going to look like yet,” Durling said.
At least one analyst was not surprised, based on the success of rival warehouse retailer Costco and Target’s announcement Thursday that it was laying off nearly 500 employees and not filling more than 700 open jobs.
“I’m not 100 percent shocked,” said Brian Yarbrough with Edward Jones in St. Louis. “It’s tough out there. The low-income consumer continues to struggle.”
Sam’s Club’s same-store sales, without fuel, rose just 1.1 percent when comparing the third quarter with the same period the year before.
While same-quarter, same-store sales have been crawling up at a rate of 1 percent to 2 percent, Costco’s same-store sales growth has been hovering about 6 percent, Yarbrough said.
The segment’s CEO, Rosalind Brewer, said in November that Sam’s opened 13 new and relocated clubs in the third quarter.
Incoming Wal-Mart Stores Inc. President and CEO Doug McMillon was once president and CEO of Sam’s Club. He takes over as head of the overall company next month.
Business, Pages 27 on 01/25/2014