Company News

Walmart in midst of 'massive reset' as inflation persists: former Sears Canada CEO

Retail is dealing with a post-COVID hangover: former CEO of Sears Canada Mark Cohen, former CEO of Sears Canada and director of retail studies at Columbia Business School, joins BNN Bloomberg to talk about retail realities in 2024.

The former CEO of Sears Canada says ongoing inflationary pressures are weighing heavy on retail giants like Walmart, which is in the midst of a corporate overhaul aimed at reducing costs.

Bloomberg reported on Monday that the company is cutting hundreds of corporate jobs and asking remote workers to return to offices – a move Cohen said was “long overdue.”

“Though the U.S. has done a great job of reining inflation in, it's still there… so businesses like Walmart are engaging in somewhat massive resets by adjusting their facilities and adjusting their manpower roles.”

Bloomberg reported on Monday that the company is cutting hundreds of corporate jobs and asking remote workers to return to offices – a move Cohen said was “long overdue.”

The company is also asking corporate workers in smaller offices in Toronto, Dallas and Atlanta to switch to larger hubs such as Walmart’s headquarters in Bentonville, Arkansas, or larger offices in San Francisco and New Jersey.

Cohen, who is currently director of retail studies and adjunct professor at the Columbia University graduate school of business, said virtually all of Walmart’s operations have been impacted by cost pressures, creating the need to downsize.

“All things you can think of have been influenced by what we've seen by way of inflation, and the only way to deal with that is to adjust the dials of your organization to suit,” he said.

“It's a painful, challenging and somewhat risky process, but companies that basically stick their heads in the sand eventually get terribly hurt for that fact.”

‘Remote work doesn’t work’

Cohen said that Walmart’s decision to ask workers to return to the office is ultimately the right call, but he acknowledged that it will continue to be a “painful process.”

“COVID was an enormous disruption in the lives of virtually everyone, and as businesses went remote, they found ways to continue to stay upright, but remote work doesn't work for most businesses, in my opinion, especially consumer-facing businesses,” he said.

“Lots of folks fell in love with the idea of working from home, working remotely, not having to commute and having tremendous flexibility over their lives. It's understandable, but it is unfortunately increasingly incompatible with the normal operations of an enterprise.”

Bloomberg reported that Walmart sent out an official memo to employees on Tuesday, urging workers to return to their offices in order to drive collaboration and innovation.

“It’s a tough call,” Cohen said, “but it’s an inevitable one.”

Walmart is set to release its first-quarter earnings on Thursday morning.

With files from Bloomberg News