November 27, 2014 / 7:03 AM / 4 years ago

Wal-Mart cuts dozens of China executives to cut costs

(Reuters) - Wal-Mart Stores Inc said it has cut more than 20 mid-level jobs in China as part of its effort to lower costs in the world’s second largest economy where it has been grappling with slower sales and tough price competition.

The Wal-Mart company logo is seen outside a Wal-Mart Stores Inc company distribution center in Bentonville, Arkansas June 6, 2013. REUTERS/Rick Wilking

Raymond Bracy, China-based spokesman for Wal-Mart, said the staff cuts were a “necessary business reality”, adding the retailer would pay appropriate settlements to the employees affected.

Wal-Mart, which has more than 400 stores in China, says it employs around 2 million people worldwide.

Bracy declined to comment further on the China job cuts. Bloomberg reported earlier that about 30 senior executives, including directors and vice presidents from Wal-Mart China and its wholesale arm, Sam’s Club China, had been dismissed.

Chinese media also reported that the retailer was cutting over 100 jobs, including senior and mid-level executives.

Walmart reported a 0.8 percent fall in China sales during the quarter to Oct. 31, which it attributed to government austerity measures and deflation.

Wal-Mart has faced setbacks in China, including an embarrassing food safety scandal in which its popular “Five Spice” donkey meat was found to have traces of fox meat. It is building its own distribution centers to manage product quality.

Last October, Wal-Mart said it planned to open 110 facilities in China between 2014 and 2016, while closing some outlets as part of an overhaul of its business there.

Reporting by Nathan Layne in CHICAGO and Paul Carsten in BEIJING; Writing by Adam Jourdan; Editing by David Gregorio and Miral Fahmy

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