Fired Walmart India executives write to headquarters

MUMBAI: More than three dozen Walmart India executives who were recently laid off have written a letter to the US retailer’s headquarters in Bentonville, terming the layoffs unfair and unrelated to performance. ET reported on January 13 that nearly 100 employees at its local unit were terminated, with the American retailer saying the next day that 56 staff members had been asked to leave.

“We have written to them individually as well as a group because the company went ahead with the firing process even after an assurance in December that there will not be any layoffs. Some had even threatened to be whistleblowers in recent real estate deals where due process was not followed,” said three former executives who were part of the communication.

“The US retailer has responded to our mail and a team from US compliance and ethics department could visit India to do a thorough investigation.”

Responding to a query by ET, Walmart said the company has built a strong compliance & ethics programme in line with its culture of integrity. “We take all allegations seriously and will review these accordingly. We are committed to growing in India, doing so in compliance with all applicable laws and in a way that benefits our associates, local businesses and the communities where we operate,” a Walmart spokesperson said.

The downsizing came as part of a larger strategy to shut the Mumbai fulfilment centre, its largest warehouse, halt newstore expansion in India and merge its wholesale back-end operations with ecommerce company Flipkart over the next few months. The world’s largest retailer acquired Flipkart for $16 billion in 2018 to gain access to India’s $670-billion retail market. Its cash-and-carry business involves selling to small neighbourhood stores, hotels and catering firms in a wholesale format.

Walmart entered India in 2007 after partnering with the Bharti Group in the wholesale business. Soon, it bought out its partner’s 50% stake and terminated franchise and supply agreements related to Bharti’s retail business in 2013. Walmart’s store expansion was put on hold between 2012 and early 2015 amid an internal probe to check if its local unit had violated the US Foreign Corrupt Practices Act (FCPA), which penalises American companies for bribery and wrongdoing overseas.

Walmart’s cutback of staff has come at a time when Flipkart announced its entry into food retail in India. Flipkart FarmerMart will sell locally produced items online and is also likely to sell through physical stores later.

India allows 100% foreign direct investment (FDI) in food retail for locally manufactured items. Food is the only segment in which etailers can sell directly to consumers. The government has asked ecommerce firms to keep food-only retailing ventures at arm’s length from flagship marketplaces by maintaining separate boards, staff, bank accounts and inventories.