The break-up of its joint venture with Bharti Enterprises and a halt in its expansion plans in India till 2015 have led Walmart India to cut down on teh strength of its employees.
Sources aware of the developments said Walmart India is laying off around 100-150 senior to mid-level employees. “The process of handing over the pink slips have begun and is expected to be complete within the next couple of days,” said an executive in the know.
The executive said Walmart India has around 1,100 employees and needs to reduce its workforce in the event of its break-up with Bharti Enterprises and the temporary halt to its expansion plans in India.
“The company had hired several employees in anticipation of its expansion plans in the country. With that being on hold, it doesn’t need the extra workforce,” the executive said.
In response to a detailed emailed query, a Walmart India spokesperson said, “Walmart is committed to India and the market. We are pleased with our established and successful cash-and-carry business and plan to grow that business. We remain steadfast in our belief in the important value Walmart brings to India, including social and environmental benefits. There has been no restructuring of associates in our cash and carry business.”
Walmart India currently runs 20 Best Price Modern wholesale units in the country. They were started in a 50:50 joint venture with Bharti Enterprises but in October the venture was called off. As per the arrangement, Walmart has decided to buy Bharti’s 50% stake in the company. Sources said that the process of disengagement between the two has begun with employees being transferred to Walmart India’s rolls.
The development also comes at a time when the company is undergoing top-level management changes in the country as well as globally. Around six month ago its India head Raj Jain had stepped down to be replaced by Ramnik Narsey as the interim India leader. Last week the company announced that Krish Iyer would take over as president and chief executive officer of Walmart India, effective January 20.
Globally also, Doug McMillon, head of Walmart’s international business, was recently named group CEO, replacing Mike Duke, who was to retire. Duke will continue to be chairman of the board’s executive committee.
David Cheesewright, who has been leading the company’s Europe, West Asia and Africa businesses, has been appointed the new president and CEO and replaced McMillon.
Despite the opening up of the multi-brand retail sector in India, the company is still undecided whether it would venture into the front-end retail segment with a new Indian partner.
In 2007, Walmart and Bharti Enterprises established a joint venture, Bharti Walmart, for wholesale cash-and-carry and back-end supply chain management operations in India selling a wide range of fruits and vegetables, groceries and staples, stationery, footwear, clothing, consumer durables and other general merchandise items.
After the break-up with Bharti, the company halted the expansion of its cash-and-carry stores in India until 2015.