Thread regarding Wal-Mart Stores Inc. layoffs

2xba,

Agreed. I fully believe Walmart is on the rank and yank system. If I'm correct, par scores now will determine if you have a job year in and year out. Perception by your boss and other leaders in your area will be reality.

csm, Another lovely aspect of Jack Welch legacy is the "rank and yank." Walmart leadership are clearly embracing of Jack Welch stack and rank strategy. Those affected by most recent layoffs were the 10% who received bad performance reviews. This will continue every year for associates. Agree with you that Walmart's hiring standards are very low compared to competitors. For some technical positions you can get hired after a single conversation about behavioral questions (I know for a fact because this is how I was hired.) Amazon will conduct technical interviews with technical supervisors who know the right questions to ask to determine whether the candidate can actually do the job.

Actually, Jack Welch reorganized the business at GE and exited low growth, low margin businesses such as small appliances and TVs. In turn, GE invested heavily into Medical Imaging equipment and other high growth, high margin businesses. GE also built maintenance businesses behind the manufacturing segments and grew GE Capital to finance the sale and leasing of equipment. GE actually had just as many employees as when Jack Welch assumed the CEO position. Jack's replacement in turn has exited most of the GE Capital businesses and GE is no longer in Plastics or Appliances. They are also selling the water business.

Walmart has not followed its business model for over 20 years, as costs have grown faster than sales. Granted, WMT has more formats and has added grocery to the assortment, however, something has to give. Additionally, WMT was slow to the ecommerce game, and has a pristine balance sheet. The firm had the capacity to innovate faster, but failed to act with speed. This is a quality of management issue.

I can tell you for sure that Amazon hiring practices are much different from Walmart's. Additionally, in some cases firms require applicants to take critical reasoning and leadership/personality assements as a part of the interview process.

I agree that the way that the layoffs have been handled are troubling. Because they have occurred in phases, people are scared and distracted. Leadership should be communicating and out front providing some transparency. The retail industry is under major transformation and no firm is immune to this reality.

Having worked at Walmart Corporate, I can tell you that I was making much more than others who had been there in the same position for some time. And I can also tell you that while there are people who have been there a long time who are great, there are just as many people there for a long time, who are not and needed to go.

1iks,

You have it exactly right. Think about how unions came about in the first place. You had huge riots and conflict as workers became fed up and literally had nothing left to lose by standing up for workers rights. Corporations and government are setting up an environment where I see some new version of mass unionization returning.

@1uul - the statement that the company exists only to further interests of shareholders is a fallacy. This is a complicated subject and I'd agree that this statement is widely accepted nowadays, yet, it does not make it valid. There are multiple interconnected interests and reasons why a company exists - these include customers, employees, shareholders, society, the nation. You take one out of the equitation and the concept crumbles.

Look at how companies behaved from 1940 to 1980 when Jack Welch invented mass layoffs and 'the shareholder first mantra' - before that, the nation and the worker were focal points of every company around - and the market worked, the profits grew, the country prospered. And then things changed, Welch nuked 170K employees and focused on the shareholder. How well did this serve GE? It was amazing for about 15 to 20 years, every year they would cut more, squeeze that extra penny needed to boost the EPS ratio. Yet, this concept has its limits and at some points you cannot cut any more - and where is GE now, that amazing icon of American entrepreneurship.

Sorry for going a bit off tangent here, but I believe that things will reshuffle again - you just cannot keep screwing the worker indefinitely - you got to keep things in balance and the balance has been disrupted for 3+ decades now.

To prove all of this you do not have to examine more than the outcome(s) of the latest presidential race - on both left and right there are hundreds of millions of angry people, and they are not getting any happier...

So, let's continue to make the shareholder happy and screw the worker - it'll end in tears...

1hnp,

I think employees understand what you're saying. At issue, however, is HOW the reorganization is being handled. It's dragging on so long that it is demoralizing and terrorizing the associates.

It also looks to be cutting the wrong people at times just to save a buck. These layoffs have the appearance of targeting older associates and long tenured associates for no other reason than the associates are either old or well paid. That may not be the truth, but it looks that way to some and the people who feel that way are obviously disappointed in leadership.

Sam Walton did amazing things with ordinary people because his people loved him and they were inspired by him. The problem with the company over the last decade is that it has been run poorly by the leaders. The leaders said one thing in company meetings but did another in everyday practice. Those same leaders have been steadily blaming their leadership shortcomings on the associates.

There seems to be this attitude with leadership that they don't have the talented associates needed to go head to head with Amazon, Aldi, or Lidl. This attitude is obvious and so wrong. Walmart associates are capable of feats that I'm sure would surprise everyone from the company leaders to Wall Street. You just have to inspire them. And you can't get that done through layoffs and fear.

Just the opinion of a peon though. Nobody listens to us.

1uu1,

Excellent post!!!!

Walmart is an "Employer At Will" like any company in the DJIA or S&P 500. Behind the Basic Beliefs are the realities of a publicly traded company that needs to deliver value over the long term to survive and remain relevant. Walmart's profitability has been impacted by a deleveraging of expenses (In direct contrast to the business model) over time. It should not come as a surprise that the company is under a reorganization. Additionally, with the threat of DTC and smaller B&M players (Aldi, Lidl) there is even more pressure to lower prices and reduce costs. WMT needs to be more agile to address these threats.

I do not like layoffs either but have gone through many in my career. People should remember that they are employees at will and the company reserves the right to terminate any employee at any time for any reason. Walmart has embraced the people culture for years and I believe there is a major difference based on the public company demands versus a private company culture. Unionizing is always a comfortable talking point and I have worked in both environments. Truth is it cuts both ways. Sometimes the first should first and under a union formula that would not be possible or viable. I am not knocking Unions but there is no safe harbor in a public company NOR should there be. It exists for shareholders and as part of that should ensure it takes care of its people. Walmart is making hard choices at a high level but it's no different than many of the large companies have done in their history..... it just sad it is happening now. I wish you the best and hope everyone lands something better in the future

Without a union they can do whatever they want.

it's legal

EVERYONE knows that...but, of course, it's not ethical.

it is because the last person in is the cheapest