Wal-Mart cuts about 10% of workforce at Sam’s Club

Of the 11,200 jobs cut at Sam’s Club, 10,000 are positions where workers offer food samples and showcase products. Of the 11,200 jobs cut at Sam’s Club, 10,000 are positions where workers offer food samples and showcase products. (April L. Brown/Associated Press/File 2009)
By Mae Anderson
Associated Press / January 25, 2010

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NEW YORK - Wal-Mart 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 Shopper Events, 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 staff members across its 600 stores, including nine in New England. The cut 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 members.

“In the club channel, demo-sampling events are a very important part of the experience,’’ Brian Cornell, Sam’s Club chief executive, said in a phone interview. “Shopper Events specializes in this area, and they can take our sampling program to the next level.’’

Shopper Events, based in Rogers, Ark., currently works with Wal-Mart’s namesake stores on in-store demonstrations.

Cornell has been working to improve results since taking the helm in early 2009, introducing new store formats and price cuts and offering more variety and more brands.

During Wal-Mart Stores’ most recent quarter, revenue at the Sam’s Club division slipped nearly 1 percent to $11.55 billion, while US Wal-Mart stores posted a 1.2 percent sales increase to $61.81 billion. Earlier this month, Wal-Mart Stores closed 10 underperforming Sam’s Club locations, resulting in the loss of about 1,500 jobs.

“It’s not a cost-cutting measure; it’s really an investment in enhancing our demo program,’’ Cornell said. Shopper Events plans to hire “roughly the same number of people’’ cut, Cornell added.

Cornell said Sam’s Club decided to eliminate its membership unit because “we have found that we can more effectively drive membership through targeted member acquisition events and by increasing our partner membership programs.’’