WMT Walmart Inc

By Eric Bellman 

NEW DELHI -- Walmart Inc. has laid off more than 50 of its managers in India as it pivots its focus to business-to-business e-commerce to take on Amazon.com and other rivals in the South Asian nation.

Walmart said Monday that it has let go of 56 managers -- eight of who were senior -- as it reorganizes operations of its more than 25 Best Price wholesale outlets in India.

"Our members are increasingly becoming omni-channel shoppers," buying both online and offline, Krish Iyer, president and chief executive of Walmart India said in a news release. "We are also looking for ways to operate more efficiently, which requires us to review our corporate structure to ensure that we are organized in the right way."

Walmart India has a total of 5,391 employees in the country.

India's restrictions on foreign investment in retail have kept Walmart from selling directly to consumers there for decades through stores. Instead it has set up a wholesale stores. Growth has been slow but it bought one of India's largest e-commerce companies, Flipkart Group, for $16 billion in 2018 to turbocharge its expansion.

The management shake-up is part of Walmart's plans to use the know-how, connections and talent it acquired when it bought Flipkart to grow much faster and better serve its members online, said one person familiar with its plans.

The change in management was needed as the company shifts away from opening more stores quickly and building its own logistics chain, and invests more in developing e-commerce and delivery technology, the person said.

Walmart's more than one million members customers in India are mostly small businesses, such as restaurants, hotels and mom-and-pop grocery stores, called kirana in India.

"You look at the kirana stores and there is a change of focus. Members are going online now and fewer are going to stores," the person said. "Business is growing very rapidly but the propensity to visit stores is less today."

India's massive retail market is largely untouched by global retailers and tough to crack because it is dominated by millions of tiny shops, tea stalls and vegetable carts. Rather than battle this powerful lobby, Amazon, Flipkart and other e-commerce leaders in India have been trying to join forces with the local merchants by hiring them for deliveries and helping supply their stores.

India's richest man, Mukesh Ambani, is about to launch his own e-commerce initiative which is also trying to use the mom-and-pop shows as intermediaries. Walmart's maneuvers should better set it up for the new competition.

"We are thus investing heavily in technology and have a healthy pipeline of Best Price stores," said Mr. Iyer in the release. "We are also looking for ways to operate more efficiently, which requires us to review our corporate structure to ensure that we are organized in the right way."

Walmart denied local media reports that it was planning a second round of layoffs or intended to pull out of the bricks-and-mortar store business.

Write to Eric Bellman at eric.bellman@wsj.com

(END) Dow Jones Newswires

January 13, 2020 07:39 ET (12:39 GMT)

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