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Editor's Note: This an abridged excerpt from a research note written recently by our Retail team led by Sector Head Brian McGough. If you're an institutional investor and are interested in accessing our Retail research (or any of our other sector coverage areas) please email sales@hedgeye.com.

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2015 has been less than a banner year for Walmart.

For starters, the stock is down 24% YTD as the company took one on the chin as it invested in both its people and e-comm capabilities. The new minimum wage standard at $9.00 alone will cost the company $0.24 (up from the original guidance of $0.20) add on top of investments in e-comm and Fx pressure and we get to an earnings growth rate for the year of -10% at the mid-point of the guide.

It's Been a Tough Year In Bentonville | $WMT - z wamo

We've seen Walmart try to offset these costs over the past year by renegotiating terms with its vendors (not once, but twice), cutting some 24-hour locations, and reducing employee hours.

Now it's going after its headcount at HQ.

This 2.5% headcount reduction is just a drop in the bucket compared to the 13% cut Target (TGT) announced earlier this year. But, its pretty obvious that Walmart is scratching and clawing for every bps of margin.

That's bad news for the rest of retail.