Wal-Mart Stores Inc.’s share price up, to eliminate 250 jobs in China to improve efficiency

Wal-Mart Stores Inc. said that it plans to cut 250 positions in China in an attempt to improve its efficiency. A spokesman of the U.S.-based company, Ray Bracy, said in a phone interview today that the lay-offs will be mainly in the companys merchandising and marketing units.

Mr. Bracy said in a statement, cited by Bloomberg: “Why would you have 28 buyers in 28 different cities buying bottled water? By creating a logistics network, we’ve been able to streamline and centralize.” As reported by the Wall Street Journal, Mr. Bracy also added: ““It’s an innovation for Wal-Mart to see if we can learn from being a developer, how to build quality in our malls and pass those on to other developers as we rent from them.”

The jobs cuts come after the purchasing activities of Wal-Mart were concentrated into the Shenzhen headquarters at a time when the U.S.-based retailer is taking measures to restructure its business, control its expenses and increase sales in the country. Some positions in other divisions, such as tax and asset protection, will also be reduced. The affected 250 include primarily employees, who occupy mid- and lower-level staff.

Wal-Mart currently has 400 stores in China. It is to open nine new stores in the country, as well as a new distribution centre by the end of the year. In addition, an investment estimated to 600 million yuan ($97.5 million) is planned in the construction of a shopping mall, which will be the first of its kind for the company ever.

By the end of 2014 Wal-Mart is expected to have opened a total of 25 new hypermarkets and Sams Clubs.

Last week a workforce trim of 30 mid-management positions was confirmed by the company as part of its restructuring strategy. The head of Wal-Mart in China, Sean Clarke, said in a statement, cited by the Financial Times: “Since 2012 we have been implementing strategic initiatives to regain price leadership, grow with a focus on business fundamentals, simplify business [and] invest in the supply chain and technology.”

Wal-Mart Stores Inc. was down 1.51% to close at $86.22 per share yesterday, marking a one-year increase of 6.43%. The company is valued at $282.10 billion. Wal-Marts shares traded at €69.70 in Frankfurt as of 9:55 GMT. According to CNN Money, the 23 analysts offering 12-month price forecasts for Wal-Mart Stores Inc. have a median target of $84.00, with a high estimate of $92.00 and a low estimate of $66.00. The median estimate represents a -2.57% decrease from the last price of $86.22.