Organizational Change Memo From Bill Simon

To: All Walmart US and Home Office Associates
From: Bill Simon, Executive Vice President and Chief Operating Officer – Walmart US
Date: Jan. 28, 2010
RE: US Organizational Changes

This year has been one of innovation and positive change for Walmart US. From our scheduling system, improvements to inventory management and our new store management structure, we have delivered significant results to our business. Our store remodels and merchandise clarity have allowed our customers to live better in a very difficult economy.

Our customers tell us that our stores have never been better and our associate engagement scores are best in class. Yet at Walmart we have a responsibility to always look for ways to improve. Sam Walton taught us that we must never get set in our ways, to innovate and change; we always look for ways to run our business better so we can continue to offer our customers lower prices.

In this spirit we are announcing a new Walmart US field structure. I’d like to take this opportunity to explain how these changes will sharpen our ability to help our customers save money so they can live better, while at the same time provide growth opportunities for our associates and improved returns for our shareholders.

Our New Structure

As Eduardo explained in the memo you received earlier, our new structure will align three very successful operating divisions – Logistics, Real Estate and Store Operations under a unified leadership team. We will organize into three distinctive geographic business units (GBUs) – Walmart West, Walmart South and Walmart North.

The power we will unleash by bringing our Logistics team, with its worldwide, best-in-class reputation, and industry-leading Real Estate team together with our Walmart US Stores division, will help us further transform the business and unlock opportunities for our customers, associates and shareholders.

Introducing the Senior Leadership Team

I am pleased to announce that Raul Vazquez has been promoted to EVP and President of Walmart West. Raul was most recently President and CEO of Walmart.com. Under his leadership, the team established a strong foundation for our e-commerce strategy, the fastest-growing marketplace segment.

Leading Walmart South as EVP and President is Rosalind Brewer. Before her promotion, Roz was President of the Southeast division for Walmart US where she led a business and people transformation in that division.

Hank Mullany has been promoted EVP and President of Walmart North. Hank was previously President of the Northeast division of Walmart US and under his leadership the division grew into one of our best performing, highest growth businesses.

Eric Zorn, President of Walmart Realty, and Johnnie Dobbs, Executive Vice President of Logistics will continue to drive functional excellence and global leadership in their respective areas. Eric and Johnnie have built world class organizations for Walmart. Their roles will be expanded further as we align our operating groups.

This team of leaders will share more detail with their respective organizations shortly.

Growing Our Store Management Teams

One exciting benefit to this new structure is the definition of effective career paths. We will be able to develop and grow our talent more quickly and provide opportunities throughout the organization. By reducing our Market Managers’ span of control, they will be able to focus on developing their Store Managers and to implement new productivity initiatives. The net impact will be stronger Store Managers with significantly more growth opportunities in the future.

We have also changed our Regional General Manager (RGM) structure by adding smaller regions at the Senior Director level to augment the VP RGMs. This move creates a stepping stone for Market Managers to gain leadership experience as they grow. We have also changed the RGMs’ span of control, to allow them to develop their Market Managers with a laser sharp focus.

Beginning Feb. 1, we will transfer the responsibility for store merchandising from the Market Team to the Zone Merchandise Supervisors in our stores. The most difficult part of this decision is the impact to the Market Team members whose roles have been eliminated. I would like to thank these associates for their contributions, and reiterate that the elimination of this position is not related to job performance. We expect many of our displaced associates will find open opportunities within the organization.

Finally, together with John Fleming, our Chief Merchant, we are creating an important new organization, Store Merchandising Execution, which will connect merchandising more closely to our operations and to our customer. This new organization, led by Andy Barron, Senior Vice President, Store Merchandise Operations, will design merchandise strategies for each of our GBUs and translate those plans into executable customer-focused programs. Andy will report to both John and me.

Puerto Rico

We are also extremely pleased to announce that we will align our Puerto Rico business with the US. The expertise and talent they bring in Merchandising and Marketing to one of our fastest growing customer segments in the US will certainly benefit our broader business. In turn, leveraging the US scale should provide significant benefit to our customers in Puerto Rico. Renzo Casillo, president and CEO – Walmart Puerto Rico, will continue to lead his team.

At Walmart, we don’t change to keep up with others; we change to set a new course for others to follow. We change so our customers can afford to live better. From Sam Walton’s bold moves in the 1960s to David Glass’ development of the Supercenter, we have a history of defining the retail industry. Today’s changes lay the foundation for what retail will become tomorrow.

I ask you to give our new leaders your full support as they lead in the style of Mr. Sam and others who have continually built this company into the only organization that helps people save money so they can live better.