January 27, 2018

Walmart partners with Rakuten, cuts corporate jobs

As a direct challenge to Amazon, Walmart formed a strategic alliance with Japan’s largest e-commerce company Rakuten whose subsidiary Kobo will sell e-books, audio books and e-readers through Walmart stores in the United States allowing the retail giant to sell a catalogue of six million e-books and audiobooks.

As part of the deal, Walmart will replace its existing online grocery delivery service in Japan, enabling customers to place orders through Rakuten that will be jointly fulfilled by the two companies. The new online grocery delivery service is expected to launch in the third quarter of 2018.

“We’re constantly exploring new ways to make every day easier for customers by offering great experiences in stores, online, via mobile—no matter how they want to shop,” president and CEO Doug McMillon said. “We look forward to expanding our grocery footprint in Japan and launching a new offering of eBooks and audiobooks for our customers in the US,” he added.

“We are excited to partner with Walmart because of its commitment to creating the best solutions to serve customers with low prices,” Rakuten chairman, president and CEO Hiroshi “Mickey” Mikitani said.

Meanwhile, Bloomberg reported Walmart is cutting up to 1,000 jobs at its headquarters to compete with Amazon. The first round of layoffs affected around 500 jobs in the marketing, human resources, merchandizing, real estate and other departments this week and employees were given 60 days to find a new role. The second phase is expected in 2019, where about 500 jobs are expected to be slashed.  

CEO Doug McMillon thinks a leaner organization will better battle Amazon saying Wal-Mart “is not where we want to be” in terms of reducing corporate expenses.


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