Walmart (NYSE: WMT) has culled 1% of its workforce in India as it seeks to restructure amid a turbulent atmosphere where it faces protests by Indian shopkeepers and consumers and a looming antitrust investigation by the government.
Walmart cut 56 manager positions as it seeks to restructure its Indian operations. Walmart stated that it has no plans to shut down physical operations and instead plans on growing its wholesale business in the Indian market. Walmart India's Chief Executive Officer Krish Iyer stated that Walmart is "looking for ways to operate more efficiently, which requires us to review our corporate structure."
There are reports arising that Walmart plans on deeper cuts to its Indian operation, with rumors circulating that Walmart was planning to lay off more workers in April and wind down its physical presence, which has struggled to become profitable. Iyer stated that these rumors are false and assured consumers and investors that Walmart would not be closing down its operations. While Walmart India's brick and mortar operations aren't as profitable as Walmart may have hoped (largely due to Indian regulation made to protect mom-and-pop stores which prohibit foreign companies like Walmart from selling directly to consumers), Walmart has a healthy ecommerce presence through its subsidiary Flipkart, faring better than competitor Amazon (NASDAQ: AMZN).
Walmart's woes go well past its struggling profitability, however. The company is facing immense pressure from both the Indian populace and the Indian government. Both Walmart and Amazon are the subjects of an antitrust investigation by the Competition Commission of India. Allegations lobbied against the companies are primarily centered around showing a preference for certain sellers, including deep discounts and disproportionate promotion. The preferred sellers are affiliated with the companies in some way, according to allegations. Also, both companies face stiff protests from Indian citizens, primarily from shopkeepers and their supporters. The Indian shopkeeper's union, which has been particularly vocal against Amazon and Walmart, has great political strength in India and poses a substantial threat. The Union, which represents 70 million merchants, represents a large portion of Prime Minister Narendra Modi's political base and is instrumental in implementing regulations that restricted Walmart's ability to sell directly to consumers.