Walmart Will Simplify Its Sprawling US Store Operations
Walmart Stores is reorganising its US store operations to simplify the sprawling business, as part of a bid to maintain growth and compete with the likes of Amazon.
The idea is to react more quickly to changes and better communicate, said spokesman Kory Lundberg. According to a person familiar with the overhaul, the retailer will consolidate its US business to four divisions, down from six, each of which is managed by a senior vice-president.
Investors welcomed the move, sending shares up the most in a week. The stock climbed as much as 1%, to $79.91, on Tuesday, bringing its year-to-date gain to about 15%.
The shake-up follows several rounds of job cuts at the retailer’s Bentonville, Arkansas, headquarters over the past two years. Chief executive officer Doug McMillon has been trimming expenses to help offset increased spending on e-commerce and employee wages.
In simplifying its US business, Walmart said that it’s returning to an approach that it was using before another reorganisation a few years ago.
“Our last field restructure was several years ago, and our business has changed over that time,” Lundberg said in a statement. “The structure we are putting in place will help improve communication and execution, streamline decision-making, and help us accelerate our pace of change.”
The number of US regions will be reduced from 44 to 36, according to the person, who asked not to be identified because the details of the revamp aren’t yet public. Executives affected by the move could take on other roles inside the company, the person said.
Walmart was already operating with only five divisional chiefs. Martin Mundo, who oversaw stores in the south-eastern US, was moved to run the company’s produce and sourcing business in July, replacing Shawn Baldwin. All divisional heads report to executive vice-president Mike Moore.