Walmart Stores Inc. will cut about 11,200 jobs at Sam's Club warehouses as it turns over the task of in-store product demonstrations to an outside marketing company.
The move is an effort to improve sales at Sam's Club, which has underperformed the company's namesake stores in the United States and abroad.
The cuts represent about 10 percent of the warehouse club operator's 110,000 staffers across its 600 stores. That includes 10,000 workers, mostly part-timers, who offer food samples and showcase products to customers. The company also eliminated 1,200 workers who recruit new members. Employees were told the news at mandatory meetings yesterday morning.
"In the club channel, demo sampling events are a very important part," said Sam's Club chief executive Brian Cornell in a phone interview with The Associated Press. "Shopper Events specializes in this area and they can take our sampling program to the next level."
Shopper Events, based in Rogers, Ark., works with Walmart's namesake stores on in-store demonstrations. Sam's Club is looking to the company to improve sampling to entice shoppers to spend more.
Cornell has been working to improve results since taking the helm in early 2009, introducing new store formats, price cuts and offering more variety and more brands of items from take-home meals to baked goods.
Sam's Club has tried to steal customers from grocery chains and rival warehouse stores like Costco Wholesale Corp. by offering more everyday goods.
But during Walmart Stores' most recent quarter, revenue at the Sam's Club division slipped nearly 1 percent to $11.55 billion while U.S. Walmart stores posted a 1.2 percent sales increase to $61.81 billion. Earlier this month, Walmart Stores closed 10 underperforming Sam's Club locations, resulting in about 1,500 jobs lost.
Analysts said yesterday that while this marks Walmart Stores' largest job cut, they expect many employees to be picked up by Shopper Events.