Declining sales and a corporate restructuring are to blame for a round of layoffs by Walmart stores in China.

The Wall Street Journal reported 250 mid and lower-level employees responsible for corporate affairs and asset protection have been laid off by the company.

With Walmart closing its northern regional office in Dalian, the retail chain looks to restructure its Chinese division by opening nine new stores and a distribution center. Walmart also has plans to open a RMB 600 million (US $97.5 million) shopping mall in Zhuhai.

During the third fiscal quarter, Walmart experienced a drop of 0.8 percent in total sales, a trend attributed by company executives to governmental austerity measures and a slowdown in the economy.

In another report published by Sina News that contradicted the Wall Street Journal, Walmart cutbacks were said to specifically target personnel in middle and upper management, and will affect a total of 118 people.

A Walmart manager said, “Some former colleagues were ‘forced” to quit. By these terms, Walmart employees have never had any rights.” A Walmart middle manager complained, “[This round of layoffs] is the same as before in that the middle managers that were fired didn’t have the right to arbitration.”

Zhang Xuejing, the chief of Walmart public relations, said: “The company is making adjustments to the present structure and is trying to simplify the business stream. Only about 20 personnel in middle management will be affected.”

Layoffs were only one part of the restructuring as the shuffle included the promotion of Ke Junxian from Walmart China’s chief of operations to its CEO.

On December 9, Walmart is set to close another store in Hefei. Further layoffs are expected.

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Photo: asia society