Recruiting in China

WAL-MART Stores Inc will reduce its employees in China by more than 100 as part of a restructuring program in its Global Procurement Division after pressure mounted on the firm due to slower profit growth.

The world's biggest retailer plans to cut the payroll in its four sourcing offices in Shenzhen, Shanghai, Putian and Dongguan, according to Huang Jianling, a communications official from Wal-Mart China.

The lost jobs in China account for half of its global reduction.

"We have found some department functions overlap," said Huang via telephone with Shanghai Daily. "The consolidation will help to reduce redundancy and improve efficiency."

Huang added that some new positions will be created, but did not elaborate.

The layoffs in China, announced last weekend, came after the retailer posted a less-than-anticipated profit for the second quarter. Wal-Mart also lowered its earnings forecast after cutting prices on thousands of stationary items.

"The restructuring will by no means reduce our sourcing from China," Huang said.

Wal-Mart entered the Chinese market in 1996, and set up its first procurement office in Shenzhen in 2002.

It has bought an average of about US$9 billion in products from China per year over the past two years.

The Bentonville, Arkansas-based retailer has been aggressively expanding in China, where retail sales grow more than 14 percent year on year despite growing competition.

The market still has huge potential as the central government stepped up efforts to encourage domestic consumption so that the economy is less dependent on exports and investment in fixed assets.

Wal-Mart operates more than 86 stores in China with a total investment exceeding 1.7 billion yuan (US$229 million). France-based Carrefour SA owns 95 stores.

It acquired a 35 percent stake in China's Trust-Mart, which runs more than 100 hypermarkets, earlier this year.

The company plans to double its outlets in China in the next five years, Bloomberg News said in earlier reports.