As I reported yesterday, Wal-Mart Stores, Inc. (NYSE: WMT) is in the process of arranging quite a few cuts in its purchasing and procurement divisions in the Southeast Asia region. The cuts are coming from Wal-Mart China operations and look to be a realignment of procurement positions to centralize the purchasing centers for a good portion of the retailer's international operations.But, is there more to it than that? The total headcount being cut in Wal-Mart's global procurement division is close to 250 people, with many of them in the China area and surrounding vicinity (including Singapore and Shanghai). Is Wal-Mart pulling back on its potential focus of the Chinese market to more heavily concentrate on another international market with huge promise -- India?
The case could certain be made for that point of view. And, with a new "Employment Contract Law" about to go into effect in China, this may be just a way around labor issues in the future for the retailer, something I suggested yesterday.
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