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Wal-Mart closes NYC office, deals with health insurance issues

CYRIL JOSH BARKER Amsterdam News Staff | 11/2/2011, 6:09 p.m.
Reports indicate that Wal-Mart recently closed its New York apparel office. The 275 employees who...
Walmart shut out of Willets Point development

Reports indicate that Wal-Mart recently closed its New York apparel office. The 275 employees who worked at the office were informed about the move from Wal-Mart officials last week.

The office, which opened in 2009, was located on Broadway between 37th and 38th streets. The retail giant occupied 46,000 square feet of a building, taking up the entire second floor and second-floor mezzanine.

Employees who worked in the Big Apple office primary dealt with label design and development, along with shopping brands.

"No decision like this comes with ease," Lisa Rhodes, senior vice president of Wal-Mart U.S. apparel, said in an interview with Women's Wear Daily. "But the reality is for the last 15 months, the entire fashion team has been concentrating on core basics, with some fashion basics. The strategy is working."

Employees of the New York office are packing their things and moving to Wal-Mart's headquarters in Bentonville, Ark. It isn't clear if all 275 employees from the New York office will be making the move to the Natural State.

"Everything will be done out of Bentonville," Rhodes said. "The entire apparel team will be based in Bentonville. Confidence in the strategy is why we are moving. The goal is for the majority to move to Bentonville, which shows you the confidence we have in the strategy because we want [the existing] team to execute it."

While Wal-Mart is moving employees out of New York, the retailer has also come under fire for taking away health insurance from new part-time sales associates in its stores. Full-time employees are also going to see a rise in premiums, but current part-time sales associates will keep their coverage.

Over 1.4 million people work for Wal-Mart. The retailer reportedly claimed that rising health care costs are to blame, which prevent the company from giving benefits to future employees who work less than 24 hours a week. This comes as a sharp blow to those looking for part-time work for the upcoming holiday shopping season.

Premiums for many workers are being reduced by half, and tobacco users will see a 40 percent increase in premiums. Breaking down the new premiums, individuals will now receive $250 annually toward expenses rather than $500, and families will receive $500 instead of $1,000.

"Health care costs are continuing to go up faster than anyone would like," said Wal-Mart spokesman Greg Rossiter in a media statement. "It is a difficult decision to raise rates, but we are striking a balance between managing costs and providing quality care and coverage."

However, critics say Wal-Mart can in fact afford the cost, since it made $16 billion in revenue last year, and that the cut in benefits is a means to grow profits.