The world’s biggest retailer said it plans to cut an estimated $1 billion in the next three years as it seeks to reduce the number of products it sells online and focus on brick-and-mortar stores.
The move will help Walmarts more effectively combat the rise of Amazon and other online retailers that undercut the company’s sales and service.
Walmart CEO Doug McMillon announced the cuts during an earnings call with analysts on Thursday.
The company said it will also cut $200 million in costs in the fourth quarter of this year, as it shifts some of its online inventory to offline locations.
Walmarts’ online sales fell $4.2 billion in 2016.
McMillon said the company would focus on bringing online orders online as well as selling in stores and by phone.
He said the new strategy will help the company “bring more of our products to market and better serve our customers.”
“I can tell you that we will continue to invest in our online business, and I expect that we’ll continue to do so for the rest of the year,” McMillon told analysts.
Amazon’s Amazon Web Services unit is a major factor in the growth of online shopping.
Walmart’s online sales have been declining since 2010, and the company has said it is focused on bringing in more online shoppers.
Amazon said the shift to brick- and-mortier stores is expected to cost it $2.9 billion in 2018 and 2019.
The online giant has said that it will cut about $1 trillion from its business in 2019, and will also spend billions more on new software and services.
Walter Robb, the former chairman of Walmart’s parent company, Wal-Mart Stores Inc., said on CNBC on Thursday that the retailer would focus its efforts on the internet and online-only shopping.
“Our business is in real trouble and we’re going to do what we need to do to be able to be successful in the future,” he said.
“And I think we’re the only ones in the world that can do it.”
Walmart, the world’s largest retailer, said the move was part of a broader strategy to focus on its core business, which includes its grocery, convenience and pharmacy businesses.
The company said the changes will be announced at its annual meeting of shareholders next week.
Wal-Mart has seen its online sales drop to about $25 billion last year, but McMillon touted the benefits of online sales, which helped it grow its stores and revenue by $1 million.
He said the growth in online sales is helping Walmands sales to more than $300 billion this year.
WalMart said it was able to turn that into an operating profit of $9 billion last quarter, after adding $2 billion to its profits.
McMillion said Walmains profits would be more than twice that of Amazon’s because of Amazon Web services, which are used to manage inventory and store inventories.
Walstons earnings are expected to be released next week, and its stock will likely continue to rise after the announcement.