Sam's Club is laying off approximately 11,000 workers, or roughly 10% of its workforce. Last week Sam's said it was closing 10 stores and shedding 1,500 positions. It's some pretty atypical behavior by parent company Wal-Mart, a company that always seems to be in growth mode.
But Sam's is like Wal-Mart's stepchild, never really reaching the levels of success the discount and supercenters have worldwide or at home.
So Sam's is taking stock and cleaning house. The latest move lets Sam's get rid of all the folks positioned around the store doling out free samples and outsources the jobs to Shopper Events LLC. In addition to these 10,000 jobs, Sam's is eliminating about 1,200 recruiting positions. These are the people who's job it is to get new members.
Sam's is the second largest warehouse club chain after Costco and has never been able to best this competitor with its 566 stores.
It's not an easy time to be a wholesale club catering to small businesses, a sector of the economy pretty hard hit by the recession. Even category leader Costco saw sales decline in 2009. Sam's attempt to cut it's way to profitability is what retailers do when growing sales seems more out of reach.
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