Archive for Job Losses

Wal-Mart cuts 11,200 jobs at Sam’s Club

Posted in Business, Economy, General, News with tags , , , , , on January 25, 2010 by truthwillrise
A child looks at a flat screen television at a Sam's Club, a division of Wal-Mart stores in Bentonville, Arkansas June 4, 2009. REUTERS/Jessica Rinaldi

SAN FRANCISCO (Reuters) – Sam’s Club, the warehouse club division of Wal-Mart Stores Inc is cutting roughly 11,200 jobs, or about 10 percent of its workforce, as it outsources in-store product demonstrations and eliminates positions used to recruit new business members.

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Sam’s Club Chief Executive Officer Brian Cornell said on Sunday that the retailer would outline charges associated with the job cuts in February, when it releases fourth-quarter results. He said he did not expect any “material impact” on its financial results.

“We look at this as an investment in the in-club experience,” Cornell said in an interview. “This is not a cost-cutting move for us in the short term. We really hope it will be cost neutral for our operation. It’s an investment in building loyalty, enhancing the member experience and driving future growth.”

Cornell took the helm at Sam’s Club on April 3 last year and has been looking for ways to boost its sales and increase its membership ranks. Members pay an annual fee to shop in its clubs and get discounts on everything from bulk-sized packages of toilet paper to raspberries.

Sam’s Club said it will use Shopper Events, a third-party company, instead of its own employees to run in-store product demonstrations and hand out food samples — a popular tactic used by warehouse clubs to entice shoppers to buy new items.

In a memo to employees, Cornell said Shopper Events will develop a demo program, called “Tastes and Tips”, that will offer improved demonstration of items like food, beverages and electronics.

The shift means Sam’s Club will cut 10,000 jobs primarily held by part-time workers. Current Sam’s Club demo employees can apply for new jobs with Shopper Events.

Brian Pear, general manager for Shopper Events, said his company would hire about the same number of employees being let go by Sam’s Club. But he said there was no guarantee it would hire former Sam’s Club employees to fill the positions.

Cornell and Pear declined to disclose terms of the deal.

Sam’s Club, the No. 2 U.S. warehouse club operator behind Costco Wholesale Corp, also said it was cutting the new business membership representative position, or employees in its stores who focused on recruiting new members. That will result in the loss of about 1,200 jobs, or about two jobs per every location.

Sam’s Club said it was having more success recruiting members through direct marketing or doing price comparisons, where it shows consumers how much money they could save by shopping in its clubs.

Craig Johnson, president of consulting firm Customer Growth Partners, said it made sense for Cornell to announce such extensive job cuts early on in his tenure.

“If you need to take a hit to get your cost structure down, you want to do that sooner versus later,” he said. “Given that it’s the end of the fiscal year, now is probably the best time to take the hit.”

Wal-Mart’s fiscal year ends on January 31.

While Sam’s Club said the move was not a cost cutting one, Johnson said companies like Shopper Events, which specialize in in-store sampling, can typically deliver those types of services less expensively than a retailer can.

The latest job cuts come after Sam’s Club said earlier this month that 1,500 jobs would be lost as it closed 10 money-losing stores.

At Wal-Mart’s meeting for analysts in October, Cornell said that Sam’s Club was shifting its focus from opening new clubs to remodeling existing ones as it works to increase sales.

He said then that the retailer was testing a new store layout, adding more food and drugs to its shelves, and streamlining operations to reduce labor hours in its clubs by 6 percent to 8 percent over the next five years.

Sam’s Club operates some 600 clubs and has about 110,000 employees.

Wal-Mart shares closed on Friday up 2 cents at $52.94.

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Americans Feel 15.6% Unemployment as Underemployment Surges

Posted in Economy, General, Life Improvement, News with tags , , , , , on April 7, 2009 by truthwillrise

By Matthew Benjamin

April 6 (Bloomberg) — Joseph Ramelo gave up searching for work in January to return to school, two months after he was laid off as a San Francisco election clerk. Antonio Poe is struggling to get by doing part-time landscaping in Greensboro, North Carolina, after losing his job as an electrician.

While such workers are feeling real pain from the recession that began in December 2007, they’re not represented in the 8.5 percent unemployment rate the Labor Department reported last week. They are part of a broader group that includes those who want a job but have stopped looking for work and those who want full-time positions but have to settle for part-time employment.

A measure of underemployment that counts those people has almost doubled over the past two years, to 15.6 percent, providing a more complete gauge of the labor market’s deterioration. Along with an historic drop in the percentage of the population who are working, and record numbers of long-term unemployed, the figures point to a permanent shift in employment patterns, said former U.S. Labor Secretary Robert Reich.

“We’re seeing many more people who are losing their connectedness to the labor force,” said Reich, who served in President Bill Clinton’s Cabinet and is now an economist at the University of California at Berkeley. “There is a profound weakening of ties to the labor market among a large portion of our working-age population.”

Job Losses

U.S. employers cut 663,000 jobs in March, bringing losses since the slump began in December 2007 to about 5.1 million, the worst in the postwar era, according to the Labor Department. Unemployment exceeds 10 percent in seven states. Michigan’s jobless rate is 12 percent, South Carolina’s is 11 percent and California’s is 10.5 percent.

Job losses in the current recession are more enduring than in previous ones, according to an April 3 research report by Credit Suisse.

“Permanent job losses are accounting for a much larger share of total job losses than any cycle in recent memory,” with almost half of unemployed workers “job losers” as opposed to temporary layoffs, according to the report.

The number of Americans who want full-time jobs but are working part time has increased 83 percent in a year to 9 million, according to Labor Department data.

Ken Hueser may become one of them. The Minneapolis architect lost his $60,000-a-year position in February and is applying for part-time work at garden centers for $8.50 an hour.

Sooner or Later

“The economy will come back some day, but the unknown is whether it’s sooner or later,” said Hueser.

In the meantime, said Ramelo in San Francisco, “even if I don’t have a job, at least I’ll have my degree.” He returns to his City Hall job temporarily later this month. “At this point, I’m thinking any income will do,” he said.

The increase in temporary workers is the result of a severe recession that coincides with a large drop in household wealth and a lack of access to credit, leaving laid-off workers without the cushion they might have had in a milder downturn, said Michael Feroli, an economist at JPMorgan Chase & Co. in New York. “So people are doing whatever it takes to get some income for their households,” said Feroli.

Lisa Smith, a Trenton, New Jersey, childcare worker who lost her job last September, said she is now willing to take whatever work she can get.

“I would like to work 40 hours a week, but if someone offered me 30 or 35, I’d be glad too,” she said.

More Competition

She and workers like her face greater competition, even for temporary jobs, because more people are out of work for longer periods. There are currently about four unemployed workers for every job opening, according to the Economic Policy Institute in Washington.

The long-term unemployed, those who have been out of a job for more than six months, constitute 24.2 percent of the unemployed, the largest share during a recession since the Labor Department began recording data in 1948.

“This recession is causing extreme desperation and frustration for a very wide swath of workers, even people who thought they were flexible and could find work again easily,” said Andrew Stettner, deputy director at the National Employment Law Project, a New York group that advocates for workers’ rights.

In addition, the downturn is undoing years of gains to overall employment. Beginning in the mid-1970s, the percentage of working-age adults who have jobs began to rise steadily as more women joined the workforce, from about 56 percent in 1975 to 63.4 percent in December 2006. It has since dropped 3.5 percentage points, the steepest decline in any recession since the Great Depression.

That drop has implications for the economy’s potential growth rate, because fewer workers, without a compensating increase in productivity, means less output.

“We’ve taken a huge step back here,” said James Glassman, senior economist at JPMorgan & Co. He said elevated levels of unemployment and underemployment are costing the economy about $1 trillion in gross domestic product a year.

“We’ve lost several decades of progress that was going on in terms of the people number of people coming into the workforce,” said Glassman.

To contact the reporter on this story: Matthew Benjamin in Washington at mbenjamin2@bloomberg.net

 

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