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Wal-Mart said to eliminate management layer to streamline stores

Customers walk outside of a Wal-Mart store in San Jose, Calif. Wal-Mart Stores Inc. is eliminating a layer of in-store management, part of efforts to simplify operations at the world’s largest retailer, people familiar with the decision said.
Customers walk outside of a Wal-Mart store in San Jose, Calif. Wal-Mart Stores Inc. is eliminating a layer of in-store management, part of efforts to simplify operations at the world’s largest retailer, people familiar with the decision said. AP

Wal-Mart Stores Inc. is eliminating a layer of in-store management, part of efforts to simplify operations at the world’s largest retailer, people familiar with the decision said.

The company will cut the role of zone manager and transfer the duties to other managers, said the people, who asked not to be identified because the move isn’t yet public. The change is meant to reduce bureaucracy and put more power in the hands of people running Wal-Mart’s 4,500 U.S. stores.

Until now, employees in zone-manager positions – generally about six workers per store – had responsibility over several departments. One of them, for instance, might oversee the pharmacy, health and beauty-product sections. In recent years, Wal-Mart has had zone managers in addition to individual department managers. That’s now changing, the people said.

Greg Foran, Wal-Mart’s U.S. chief executive officer, has been working to improve customer service at stores. “How stores serve customers in a simple, repeatable and sustainable way” was among the priorities he outlined in a recent meeting of U.S. executives, according to an internal document.

“We’ve recently undertaken some important activities to simplify our organization and empower our stores, our associates in our stores to make decisions,” Foran told analysts on a conference call earlier this month.

Zone managers will be allowed to apply for other positions within the store, such as salaried assistant manager or department manager, a person briefed on the changes said. The Bentonville, Arkansas-based company is expected to complete the changes by mid-June, the person said.

Brian Nick, a spokesman for Wal-Mart, didn’t immediately respond to a request for comment.

The retailer chain is undergoing a costly turnaround plan under CEO Doug McMillon, who took the reins more than a year ago. As part of the shake-up, Wal-Mart is raising wages this month, aiming to retain workers in an increasingly tight labor market. About 500,000 of its 1.3 million employees are getting a bump in pay, with hourly rates going to $9 an hour now and $10 by next year.

In an open letter to employees in February, McMillon said that the company would be “strengthening our department manager roles” and would raise the starting wage for some of those jobs to at least $13 an hour this summer and at least $15 an hour early next year.

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