WAL-MART initiated a "human resources optimization" program Saturday, requiring Chinese store managers to either take lower paid positions or leave.

The action has aroused suspicion that the world's largest retailer is using the program as a cover to cut jobs in China.

Wal-Mart's China headquarters in Shenzhen confirmed yesterday that it was offering some store managers three job options: a lower position with a lower salary, the same position at a new store in another city. The third option was to quit to allow the company "to streamline" its store management teams.

"The management structure of Wal-Mart's China stores was established 13 years ago when Wal-Mart first entered the market. It has five tiers and one of the tiers, assistant store manager, looks redundant now," said Louise Chen of Wal-Mart China's public relations department.

Employees reluctant to choose any of the options reported the matter to the Shenzhen General Trade Union earlier this week and expressed their suspicion that the Fortune 500 top company was using the program to eliminate jobs.

After a meeting with Wal-Mart management Monday, the city's general trade union acted as mediator yesterday afternoon, said Liu Qin, head of the trade union's legal department.

"We can't say Wal-Mart is cutting jobs now," said Liu. "We have informed the All-China Federation of Trade Unions about the development and will communicate with trade unions in other cities and provinces in the hope to resolve this as soon as possible."

Both Wal-Mart and Liu declined to disclose the number of employees affected by the program, asking the media and the public to give them more time to settle the matter properly.

Shenzhen's trade union branches estimated that the optimization program involved about 15 to 20 people in each Wal-Mart store and about a total of about 100 Wal-Mart employees in Shenzhen, yesterday's Southern Metroplis Daily said.

None of the Wal-Mart employees involved were available because of the sensitivity of the matter.

The program, being implemented in Wal-Mart stores all over China, comes two months after the U.S. retailer announced it would cut 700 to 800 jobs at its Arkansas headquarters in an effort to reduce costs. Wal-Mart, which runs more than 140 stores in 75 Chinese cities, opened its first Chinese store in Shenzhen in 1996.