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WMT Lays off 11,200

Monday Jan 25, 2010

Wal Mart thru Sams Club will lay off 11,200 promotional workers. But what caught my eye was the corporate speak used to justify it.

"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."

Sams will outsource to companies that provide in store people to offer samples. But, we study current liabilities in intermediate accounting. Employers must match social security, medicaid, and pay unemployment taxes on employees. As the ranks of unemployed grow, states will be looking for employers who still have people employed to replenish the unemployment funds. Seems to me that WMT sees that coming. My point is that government mandates have made employees and expensive liability, hence we see more 'outsourcing' in an effort to avoid what is increasingly viewed as unlimited employee liability. 

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4 responses to “WMT Lays off 11,200”

  1. Krystal Lewis Avatar
    Krystal Lewis

    What a coincidence, huh? It always amazes me how people find loopholes and cheat the government. Maybe each employer should be responsible for their own input in the rising unemployement rate.

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  2. Laura Contreras Avatar
    Laura Contreras

    I think that if Walmart is getting away with it then a lot more companies are going to follow them and thousands of more people are going to be out of a job. Then what.

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  3. Dennis Elam Avatar
    Dennis Elam

    Getting away with it? Is WMT required to retain everyone it hires? Today Verizon announced a big lay off. My point is that business quickly responds to the ecomomic environment, govt never does, govt has responded by hiring even more govt employees which will have to be paid for the private sector which is hiring fewer and fewer people.

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  4. Carolyn Hernandez Avatar
    Carolyn Hernandez

    In response to Sam’s Club laying off all of those employees I agree with you that the move by Sam’s Club to cut jobs is an economic decision, they won’t have to pay anything out and anytime a company outsources it is always for a lower cost, have you ever heard of a company outsourcing to pay more!

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