Sunday, January 24, 2010
Sam's Club Cuts 11,200 Jobs
This article discusses the new plan for Sam's Club to cut 11,200 jobs in order to try out a new strategy concerning their in store product demo's. Sam's Club is partnering with a third party company called Shopper Events that works with many stores with a program called "Tastes and Tips," that gives customers, "improved tastes and demonstrations of food, beverages, and electronics." Although it is a stretch, I related this article to the lectures about GDP in that Sam's Club is not making these job cuts to save money, they are trying to boost sales and keep consumer satisfaction up. On the very large scale this is what all the companies in our economy should ultimately try to do as it will increase revenues and boost the C aspect of GDP.
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First of all, the Sam's Club guy seems like he is just trying to make himself look more morally sound. The truth is that he is just trying to accomplish the goal of every company: producing the most while paying the least. He says he is doing this in order to bring in loyalty, and that may be true if this new company replacing workers does a better job at marketing the products. Anyways, he also talks about cutting labor hours as well as actual workers, so it looks like he is downsizing just like every other company.
ReplyDeleteDavid Tovar, a spokesman for Wal-Mart, stated that the layoffs were not due to the economy, and that the 10,000 employees that were laid off who demonstrate products, are able to apply for jobs with Shopper Events. Shopper Events plans to hire about the same number of workers being laid off.
ReplyDeleteSome analysts say that the most significant news was the elimination of the 1,200 membership recruiter positions. This may be a signal in the change in Sam Club's strategy towards individual households that can afford the price of membership instead from small businesses. Some retailing analysts say that Costco is one of the few companies that is able to compete with Wal-Mart.