Sam's Club to see management layoffs

In a rare move, Wal-Mart Stores Inc. (NYSE: WMT) has announced a management layoffs [subscription] that will affect its nationwide Sam's Club division according to The Wall Street Journal. The world's largest retailer is apparently under a great deal of pressure to goose productivity within that wholesale division and will therefore cut store-level management jobs.

Yet, it's interesting that laying off store management will "increase productivity". That's either a cover phrase or Wal-Mart needs to get rid of some higher-priced salaries at under-performing stores to make them more profitable. Your guess is as good as mine here.

Wal-Mart did say that it will be consolidating about 3,000 salaried-manager positions at some 580 U.S. Sam's Club stores. Perhaps the varied management positions in many stores will be combined into a "super manager" position at those stores? More details on the layoffs were not announced by the company, but with Sam's Club having more than 100,000 employees globally, this layoff will probably be a minor one, all things considered.

In another bizarre twist, a Sam's Club spokeswoman stated that the layoffs were a move to improve customer service in the stores by stating: "This is not about cost reduction; it's about providing better service to our members." I am confused on that one too -- management layoffs will lead to better customer service? How so?

With Costco keeping a much more loyal customer base these days (as well as a tighter cost control and higher profitability), perhaps this move by Wal-Mart was a tad overdue.