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

Retail giant Walmart is undergoing significant changes to cut costs as inflation continues to impact the economy. Mark Cohen, former CEO of Sears Canada, discussed the challenges in a recent interview.

Cohen highlighted that although COVID-19 is no longer a major concern, its economic effects persist, with inflation being the primary issue. “We'd like to think that COVID is long gone, but we're dealing with a hangover… the biggest issue being inflation,” he explained.

Walmart's response includes cutting hundreds of corporate jobs and transitioning remote workers back to office environments. Cohen described this move as “long overdue,” emphasizing that the company needs to adapt to the ongoing economic pressures. Employees from smaller offices in cities like Toronto, Dallas, and Atlanta are being asked to relocate to larger hubs such as Walmart’s headquarters in Bentonville, Arkansas, or to major offices in San Francisco and New Jersey.

Cohen, now a director of retail studies and adjunct professor at Columbia University, noted that almost all aspects of Walmart's operations are affected by cost pressures, necessitating a downsizing strategy. “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. He warned that ignoring these issues could result in severe consequences for businesses.

On the topic of remote work, Cohen supported Walmart’s decision to bring employees back to the office, despite acknowledging it as a "painful process." He stated that remote work, while convenient for many, is not sustainable for most businesses, especially those that are consumer-facing. “Lots of folks fell in love with the idea of working from home... but it is unfortunately increasingly incompatible with the normal operations of an enterprise,” he noted.

An official memo from Walmart, issued on Tuesday, urged employees to return to their offices to enhance collaboration and innovation. Cohen remarked, “It’s a tough call, but it’s an inevitable one.”

Walmart is expected to release its first-quarter earnings on Thursday morning, which will provide further insights into the company's financial health amid these strategic changes.