Wal-Mart Cuts 10,000 Jobs

Wal-Mart has announced it's cutting about 11,000 jobs at its Sams Club stores. Most of those cuts involve people who do in-store product demonstrations. Not all those jobs are going away: Some will be outsourced to another company. But it's unclear how many people will be hired back that way.

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Wal-Mart has announced its cutting about 11,000 jobs at its Sams Club stores. Most in those cuts involve people who do in-store product demonstrations.

But as NPRs Chris Arnold reports, not all those jobs are going away, some will be outsourced.

CHRIS ARNOLD: If youve ever been to a discount bulk shopping store like Sams Club or Costco, youve probably noticed that there are plenty of people offering you free samples. After all, if youre going to buy a 10-pound block of cheese or a giant bag of coffee, it helps to note what it actually tastes like, and everybody likes free food. Tom Vanick(ph) was shopping at a Sams Club in Gaithersburg, Maryland.

Mr. TOM VANICK: My kids like to eat the free samples and it usually gets us out of waiting in line for a hot dog or a pizza afterwards.

ARNOLD: Sams Club has an average of 20 workers at every store doing these demos, many are part time and about 10,000 of these workers have just been told that they will no longer be working for the nations largest private employer. Wal-Mart says an outside firm will be managing the in-store demos from now on. Given the economy rate now, customer Edie Brown(ph) says that thats sad news.

Ms. EDIE BROWN: I dont think that they can do as good a job as people who are here in the store because they really know their customers here.

ARNOLD: Sams Club said the move is aimed at boosting sales and did not mention cost cutting, which makes it sound like Wal-Mart just thinks this outsourced company will do a better job. But some people are skeptical.

Mr. CHARLES FISHMAN (Author, The Wal-Mart Effect): If Wal-Mart was just worried about, you know, we want somebody to do it better, well, to me, given Wal-Marts brilliance at execution, thats not a credible description of whats going on here.

ARNOLD: Charles Fishman is the author of book The Wal-Mart Effect, which looks at Wal-Marts influence on the economy. He says that Costco has been doing better than Sams Club. And he thinks that Wal-Marts trying to figure out how to cut costs and make its Sams Club stores more profitable. Maybe they dont need so many people giving out samples and maybe they dont need so many Sams Clubs.

Mr. FISHMAN: Two weeks ago they closed 10 Sams Clubs. In the whole history of Wal-Mart in North America, they only closed, like, two stores or three stores. It simply never happened.

ARNOLD: Sure, some older stores shut down, but they're almost always replaced by newer ones. Overall, Wal-Mart is healthy. Even during the recession, people have been looking to save money. They've been shopping at Wal-Mart, and the company has actually been hiring about 2,000 workers in the U.S. every month.

Mr. FISHMAN: In 2008 and 2009, thats 56,000 new jobs. Thats added jobs thats more than the total of people who work at Google and Amazon combined. Theyre Wal-Mart jobs. Theyre not Google jobs, of course.

ARNOLD: But thats a lot of jobs during a recession when many Americans are desperately looking for any kind of work that they can get. Still, union backed Wal-Mart watchdog groups have a lot of questions. Its not yet clear if this will mean pay cuts and cuts in benefits for workers even if they manage to get rehired by the outside company.

Chris Arnold, NPR News.

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