Tokyo, Wal-Mart Stores Inc.’s Japanese unit, Seiyu Ltd, boosted its annual loss forecast by 76% due to a charge to cut about 7% of its work force as it battles sluggish sales, according to a Reuters report.
Wal-Mart has invested more than $1 billion in the 393-store Japanese supermarket chain since 2002, but has yet to see anything more than temporary upswings in sales amid tough competition with rivals such as Aeon Co., the report said.
Seiyu is headed for its sixth straight annual loss in 2007, 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 last year.
Seiyu, which is 53.6% owned by Wal-Mart, said it would offer early retirement for 450 employees out of a group work force of about 6,500. The program mainly targets headquarters staff and there are currently no plans for shop closures, Seiyu said.
Seiyu, which eliminated about 1,600 jobs in 2004, said this would be the last time it needed to carry out big job cuts.