Wal-Mart Stores Inc. is cutting 450 jobs at its headquarters in Arkansas as part of a reorganization of the retailer's management structure, according to an internal memo circulated to staff on Friday.
The cuts are aimed at making the world's largest retailer by revenue a "more nimble organization" and is part of a review that will lead to "pulling back in some areas and investing in others," Chief Executive Doug McMillon said in the memo, which was seen by Reuters.
The downsizing represents a small proportion of more than 18,000 staff at the Bentonville, Arkansas office, but fits in with a streamlining effort recently flagged by McMillon, who took the helm at the retailer 18 months ago.
The move comes as Wal-Mart struggles to shore up its profit margins, which have been weighed down by a $1 billion investment announced earlier this year to boost wages for half a million store-level workers and other cost pressures. It faces tough competition online from Amazon.com Inc and from grocery retailers and dollar stores.
Wal-Mart's stock, which fell 1.2 percent to $63.53 on Friday morning, has lost a quarter of its value this year.
McMillon has said he wanted to eliminate bureaucracy and focus on the stores.
"There are no cash registers in the office," McMillon told analysts in June after the company's annual shareholders' meeting, setting off speculation he was considering cuts.
"Our customers are changing, retail is changing and we must change. We need to become a more agile company that can easily adapt to shifting customer demand," McMillon said in the memo, which gave no details on what business areas would be impacted.
There had been speculation about layoffs in Bentonville for weeks, fueled in part by local media reports.
Recruiting firms reported an influx of resumes from Wal-Mart executives concerned about their jobs, and suppliers have braced for a possible knock-on impact on their local operations.
The company holds an annual meeting with investors and analysts later this month, where McMillon and top executives are due to present their strategies and investment plans.
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