Wal-Mart outsources sampling, cuts 11,200 Sam's Club jobs

By Associated Press
Monday, January 25, 2010

NEW YORK -- Wal-Mart Stores said Sunday that it is cutting about 11,200 jobs at its Sam's Club warehouse division as it outsources in-store product sampling to the marketing company Shopper Events.

The terminations represent about 10 percent of the warehouse club operator's 110,000 staffers across its 600 stores. About 10,000 members of the demonstration department, most part-time workers, were let go. The company also cut its new "business membership representative" positions, affecting about two staffers per store, or about 1,200 staffers in total.

Employees were told the news at meetings Sunday morning.

"In the club channel, demo sampling events are a very important part of the experience," Sam's Club chief executive Brian Cornell said in a telephone interview. "Shopper Events specializes in this area, and they can take our sampling program to the next level." Shopper Events, based in Rogers, Ark., currently works with Wal-Mart's namesake stores on in-store demonstrations.

Sam's Club stores have not performed as well as Wal-Mart stores in the United States or abroad. Cornell has been working to improve results since taking the helm in early 2009, introducing new store formats, cutting prices, and offering more variety and more brands of items.

As consumers eat out less in the shaky economy, Sam's Club has tried to steal customers from grocery chains and rival warehouse stores such as Costco by shifting its emphasis to everyday goods such as food and health and beauty items.

But during the most recent quarter, revenue at the Sam's Club division slipped nearly 1 percent, to $11.55 billion, while U.S. Wal-Mart stores posted a 1.2 percent sales increase, to $61.81 billion. This month, Wal-Mart Stores closed 10 underperforming Sam's Club locations.

© 2010 The Washington Post Company