Business Intelligence on Retailing, Franchising, and Consumerism in China

Wal-Mart China Responds To Staff Reduction

In response to media reports that Wal-Mart's Global Outsourcing Center will eliminate more than 200 staff, including about 100 from China, Dong Yuguo, public relations director of Wal-Mart China, says that Wal-Mart's reduction of staff has nothing to do with the upcoming Labor Contract Law of China and Wal-Mart's outsourcing in China won't be affected as a result of this law.

Dong says that Wal-Mart's Global Outsourcing Center in Shenzhen is indeed reducing staff and a total of 250 employees from China, Singapore, Turkey, the Philippines and Sri Lanka have been involved, including 110 staff from the company's four outsourcing branches in Shenzhen, Shanghai, Putian and Dongguan. Dong says that they began planning the staff reduction a few months ago and did so just to optimize the company's outsourcing system and to avoid a waste of resources. He says that while reducing the staff, Wal-Mart has created more than 100 new jobs and it will do its best to compensate the staff affected in the reduction.

However, some employees from Wal-Mart have disclosed to local media that Wal-Mart has acted without logic during the staff reduction. They say that Wal-Mart has required the staff involved to hand over their work immediately on the same day when they were given the notice to leave and stop the use of their credit cards and employee cards which Wal-Mart offered previously provided them.

Legal experts quoted in local media say that Wal-Mart has violated China's new Labor Contract Law at least on procedures, for, according to the existing Chinese Labor Law, companies can't remove employees except for economic reasons or major changes in operations which result in difficulty in implementing the labor contract.

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