Wal-mart is making big moves to cut costs and cut labor, with the first step in that effort coming in the form of a $1.4 billion buyout of its corporate headquarters in Mexico.
Wal-Marts U.S. stores will be closed on March 13, and its headquarters will be moved to the Mexico City metropolitan area, where Wal-Mex is headquartered.
The move comes as the retailer faces a massive budget crisis, and has been trying to address its growing cash flow problems.
Walmart said it would also take a $100 million charge for new store renovations.
The move follows Wal-Am’s $3.9 billion buyback of its headquarters in the United States last month.
WalMart’s buyout, announced in November, was part of a larger plan to address the company’s debt and cash burn.
The Mexican headquarters, which opened in 1881 and has the largest number of employees in the world, will become part of the larger Wal-Mei Group, which has been working on its own plan to improve the quality of life for Mexicans and the region.
The group will focus on bringing manufacturing to Mexico’s largest city, and the U.K.-based company said it expects to invest $1 billion to $2 billion in the new building.
The company said the move was necessary because of the global demand for its products.
“This is the most significant change we have made in our entire footprint,” said Tom Paine, the head of Wal-Mo’s North American business, in a statement.
Walmart said it will not offer incentives to customers, but will give them a choice to buy a product at a discount or get a gift card, instead of paying full price.
The new deal will be available to Wal-Cards, Visa cards, Discover, American Express and MasterCard cards, Wal-Ware and Walgreens.
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(Reporting by Andrea Shalal in New York; Editing by Bill Trott)