Wal-Mart Will Simplify Its Sprawling U.S. Store Operations
(Bloomberg) -- Wal-Mart Stores Inc. is reorganizing its U.S. store operations to simplify the sprawling business, part of a bid to maintain growth and compete with the likes of Amazon.com Inc.
The idea is to react more quickly to changes and better communicate, said spokesman Kory Lundberg. According to a person familiar with the overhaul, the retailer will consolidate its U.S. business to four divisions, down from six, each of which is managed by a senior vice president.
Investors welcomed the move, sending shares up the most in a week. The stock climbed as much as 1 percent to $79.91 on Tuesday, bringing its year-to-date gain to about 15 percent.
The shake-up follows several rounds of job cuts at the retailer’s Bentonville, Arkansas, headquarters over the past two years. Chief Executive Officer Doug McMillon has been trimming expenses to help offset increased spending on e-commerce and employee wages.
In simplifying its U.S. business, Wal-Mart said it’s returning to an approach it was using before another reorganization a few years ago.
“Our last field restructure was several years ago and our business has changed over that time,” Lundberg said in a statement. “The structure we are putting in place will help improve communication and execution, streamline decision-making and help us accelerate our pace of change.”
The number of U.S. regions will be reduced from 44 to 36, according to the person, who asked not to be identified because the details of the revamp aren’t yet public. Executives affected by the move could take other roles inside the company, the person said.
Wal-Mart was already operating with only five divisional chiefs. Martin Mundo, who oversaw stores in the Southeastern U.S., was moved to run the company’s produce and sourcing business in July, replacing Shawn Baldwin. All divisional heads report to Executive Vice President Mike Moore.