Wal-Mart cuts jobs in Japan

The world's biggest retailer Wal-Mart, is planning to cut around 7% of the workforce at Seiyu, its Japanese arm. The restructuring plan is expected to incur a one-time cost of around €27.6 million.

Although the job 450 cuts have boosted the, annual loss forecast by 76%, the cuts will send Seiyu further into the red in 2007, as the retailer will incur costs associated with additional retirement benefits. Seiyu, which eliminated about 1,600 jobs in 2004, said this would be the last time it needed to carry out big job cuts.

Despite investing more than €708 million in Seiyu since purchasing the chain in 2002, Wal-Mart has yet to return a profit, giving rise to speculation that Wal-Mart may consider withdrawing from Japan, the world's second-largest retail market, as it did from South Korea and Germany. However, spokespersons for the company say that Wal-Mart  remains committed to its Japanese operations, increasing the number of 24-hour stores and refurbishing outlets.