More on Wal-Mart’s Layoffs, Product Safety

Last week we reported that Wal-Mart was laying off 180 employees from their Global Procurement Center offices in China.  Wal-Mart’s Jonathan Dong explained that these layoffs stemmed from Wal-Mart’s new contract with Intertek Group, a product safety testing firm.  Now, some Wal-Mart employees are saying that Wal-Mart will close their Dongguan, Guangdong procurement branch altogether.

So what does this all mean for product safety and Wal-Mart’s operations in China?

For more on Wal-Mart’s product safety click here.

Dongguan Branch to Close in September, Wal-Mart Hasn’t Heard About This

Wal-Mart’s formerly bustling Global Procurement Center department in Dongguan, Guangdong is nowadays desolated.  In mid-July the branch cut nearly 60 employees.  Insiders state that Wal-Mart will close the Dongguan branch by September this year, but Wal-Mart’s general headquarters says they “haven’t heard of this matter”.

Yesterday, this reporter went to Wal-Mart’s Global Procurement Center’s Dongguan branch office --- in the somewhat shabby Junda business center in east side of the city.  Even though the time was during business hours, besides security and the reception desk, this journalist didn’t see any other office staff.  The male security officer said that this office’s people in charge had all gone to Wal-Mart’s general headquarters in Shenzhen for a meeting.  “This place indeed has only but a few people left and not many people attending work.”

A Wal-Mart public relations figure confirmed for this reporter that Wal-Mart had cut nearly 60 employees from the Dongguan Procurement Center branch on July 11.  On the same day, Wal-Mart Global Procurement cut a total of 180 staff from their branches in Shenzhen, Shanghai, Dongguan and Putian and dissolved their inspection department – outsourcing the department to the Tianxiang (Intertek) Group…

This month Wal-Mart China’s public relations director Dong Yuguo (Jonathan Dong) told reporters that this was would be an upgrade for Wal-Mart’s Global Procurement inspection needs. Dong said that when the inspection department is dissolved, Wal-Mart will deliver the inspection business to Intertek because Intertek is more specialized.

Last October, Wal-Mart’s Global Procurement Centers laid off 200 people. This layoff represented over 15% of Wal-Mart’s Global Procurement staff.

At that time, reporters were told by Wal-Mart’s public relations that this was simply an internal small scale adjustment that would have no influence on Wal-Mart’s retail sector…

Posted by Research Team on Thursday, July 31, 2008

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