Sam's Club To Shed 11,000 Positions

Wal-Mart Stores Inc. will cut about 11,200 jobs at Sam's Club warehouses as it turns over the task of in-store product demonstrations to an outside marketing company.

The move is an effort to improve sales at Sam's Club and comes on top of a decision to close 10 underperforming warehouse locations, which cost 1,500 jobs.

The cuts represent about 10 percent of the warehouse club operator's 110,000 staffers across its 600 stores. That includes 10,000 workers, mostly part-timers, who offer food samples and showcase products to customers. The company also eliminated 1,200 workers who recruit new members.

President and chief executive of Sam's Club, Brian Cornell, said the move was aimed at boosting sales and customer loyalty, not cutting costs. Brian considers the development as an investment in enhancing Sam’s Club demo program.

Sam's Club has underperformed the Wal-Mart chain in the U.S. and abroad. Cornell has been working to improve results since taking the helm in early 2009, introducing new store formats, price cuts and offering more variety and more brands of items from take-home meals to baked goods.

Craig Johnson, president of retail consultancy Customer Growth Partners, said, Sam's has been the relative laggard, and it has lagged relative to its direct competitors, Costco and the smaller BJ's (Wholesale Club),"

Shopper Events, based in Rogers, Ark., currently works with Wal-Mart's namesake stores on in-store demonstrations. Sam's Club is looking to the company to improve sampling in areas such as electronics, personal wellness products and food items to entice shoppers to spend more. Shopper Events will launch a new demo program called "Tastes and Tips" with new carts, signs, uniforms and a trained team, said Cornell. He said the move was not made to save money.

"I feel betrayed," said, “Sally Grueling, 56, who had worked at Sam's Club for nine years, most recently in Hilliard, Ohio as a new business membership rep.

In a memo to employees, Cornell said eligible workers will receive severance pay and benefits, and that the company will help them find opportunities at other Sam's Clubs and in Wal-Mart stores, in addition to Shopper Events positions.