Popular American retailer Walmart has announced plans to cut hundreds of jobs in its corporate department and has called remote workers to return to the main campus offices.
The announcement comes as part of Walmart’s plan to restructure its business in an attempt to bring employees closer. According to the company’s Chief People Officer (CPO), this will result in a workforce that can collaborate on new innovations and “move even faster.”
Walmart Releases Memo to Campus Employees
In mid-May, Walmart issued a company-wide memo announcing that significant layoffs would occur at the retailer’s campus offices over the next month, per NPR.
The retail giant’s announcement will affect hundreds of corporate positions throughout the company and is part of an extensive relocation plan being ushered in by the company.
Walmart CPO Speaks on Layoffs
The memo from Walmart’s CPO, Donna Morris, that was shared with USA TODAY, further touched on the layoffs that are set to occur at many of the retail giant’s corporate offices.
Morris said changes in “some parts of our business will result in a reduction of several hundred campus roles.”
Stores Are Starting to Close
News of the layoffs comes as the company announces that it will be closing Neighborhood Markets in Aurora, Colorado, and Milwaukee, Wisconsin, as well as a Bay Area store.
This news confirms the closure of nine Walmart stores in the US in 2024.
Why Are These Stores Closing
Notices of layoffs filed with the states of Colorado, Wisconsin, and California follow the closures of four stores in California, one store in Maryland, and one store in Ohio earlier this year.
According to Business Insider, these stores were not meeting the financial performance expectations that the company has for its supermarket stores.
Walmart Is Grateful to the Workers Its Laying Off
“We are grateful to the customers who have given us the privilege of serving them at our San Diego and El Cajon stores,” Walmart spokesperson Brian Little said in a statement to Business Insider in January.
“We look forward to continuing to serve them at any of our many locations across the area, on Walmart.com, and through delivery to their home or business.”
Walmart Is Still a Mega Operation
Walmart workers are eligible to transfer to another location in cases where the stores are set to close.
However, despite Walmart’s vast network of over 4,600 retail locations in the US, which includes 3,559 Supercenters, 357 discount stores, and 673 Neighborhood Markets, some locations are not meeting the standards of the mega-retailer.
The Importance of Supercenters and Neighborhood Markets
Walmart’s Supercenters and Neighborhood Markets have a key role to play in terms of its customers.
Supercenters employ around 200 people and sell everything from groceries to electronics and home furnishings. Neighborhood Markets work differently, as they employ only 95 people and mostly focus on food, household supplies, and pharmacies.
Walmart Isn’t in Danger
However, other locations are performing so well that the company plans to open a dozen more across the US this year. Four of these new locations will be in Texas—three in Dallas and one near Houston.
Additionally, Walmart will build or expand more than 150 stores in the next five years.
Walmart’s Store of the Future Initiatives
Walmart plans to build new stores over the next few years, and they will be built with sustainability in mind.
This is part of Walmart’s Store of the Future initiative, which will include energy-efficient equipment and lighting, lower impact refrigerators, and coast-to-coast EV fast charging stations that are affordable.
Trying to Prevent Theft
Retailers are facing tough times as theft reaches record highs across the country.
Some stores have resorted to putting high-interest and high-value items behind lock and key to prevent theft, while others, like Walmart, are increasing prices to offset losses.
Stores Are Losing Millions of Dollars
“These stores lose tens of millions of dollars a year, and their annual losses nearly doubled in just the last five years,” Walmart said in a press release.
“We have invested hundreds of millions of dollars in the city [of Chicago]… It was hoped that these investments would help improve our stores’ performance. Unfortunately, these efforts have not materially improved the fundamental business challenges our stores are facing.”
Walmart CEO Threatens to Raise Prices
Walmart CEO Dough McMillion told CNBC’s “Squawk Box” that they will be increasing prices and security measures in stores to help limit loss of revenue.
“We’ve got safety measures, security measures that we’ve put in place by store location. I think local law enforcement being staffed and being a good partner is part of that equation, and that’s normally how we approach it,” McMillon said.
Walmart Benefits From Rising Fast Food Costs
Fast food prices have been rising rapidly over the last few years, which has led many who once relied on these places for a quick, cheap, and easy meal to start making food at home instead.
This means that more people have been flocking to Walmart to buy food for their evening meals. It has even led to a 3.8% rise in transactions in stores and online throughout the last quarter.
New Jersey Has Sued Walmart
The pricing situation at Walmart has become so bad that the state of New Jersey has sued the store for $1.64 million.
This comes down to illegal pricing practices that have made it hard for consumers to comparison shop, despite New Jersey being one of nine states that require stores to use standard and easy-to-understand pricing practices.
What Walmart Agreed to as Part of the Settlement
Walmart didn’t just have to hand over the money as part of the settlement; it also had to agree to a few other terms for the case to end.
It had to agree to improve employee training and randomly screen items to ensure they displayed the proper pricing measurements.
Other Stores Have Been Fined by New Jersey
Walmart isn’t the first store the state of New Jersey has sued. In November 2023, the state sued Dollar General.
The store agreed to pay $1.2 million in a settlement, which includes a $1.18 million fine. These chargers were due to higher prices being scanned at the checkout than what had been posted on merchandise displays.
Shoppers Are Boycotting Walmart
Amidst many changes to the popular store, shoppers have decided to boycott Walmart. This comes after the store redesigned its shopping cart across all its stores.
While the carts have had handy features added, such as a cup holder and a place for customers to put their smartphones or shopping lists, they have also been made taller, something many are unhappy with.
Walmart Isn’t the Only Retailer to Raise Prices
Walmart isn’t the only retailer taking security measures to prevent revenue loss. Last month, Target Chief Financial Officer Michael Fiddelke said shoplifting has jumped about 50% over the last year.
Organized retail theft comprises most of the shoplifting incidents, rather than petty theft.
Righting a Wrong
McMillion states that correcting most of the theft varies from city to city but requires implementing higher prices or closing store locations over time.
“It’s really city by city, location by location. It’s store managers working with local law enforcement and we’ve got great relationships there for the most part,” he added.
Walmart Calls for Remote Workers to Return to Office
During the announcement, Walmart also announced its plan to bring almost all of the company’s current remote workers back to its primary offices. This includes corporate employees working in the Atlanta, Toronto and Dallas offices.
The personnel have been requested to move to the retail giant’s main offices, which are situated in Hoboken, New Jersey, Bentonville, Arkansas and the San Francisco Bay Area.
Workers Required to Relocate
Walmart is requesting remote workers to relocate to offices, resulting in the elimination of hundreds of corporate roles as the company shifts staff to smaller locations.
Many of these employees, currently situated in small offices in Dallas, Atlanta, and Toronto, will need to relocate to major cities, such as Walmart’s global headquarters in New Jersey or Arkansas.
Corporate Employees Relocated to Arkansas
During a portion of the memo, Morris touched on the subject of relocation for many of the Walmart corporate workers, revealing that most will move to the company’s home office in Arkansas.
“Most relocations will be to our Home Office in Bentonville, but some will be to our offices in the San Francisco Bay Area or Hoboken/New York,” Morris said in the memo.
Other Stores Are Having to Permanently Close Down
Walmart isn’t the only store being forced to close; other stores have also found themselves in a similar position.
99 Cents announced in April that it would close all its locations in California, Texas, Arizona, and Nevada. Over 1,000 Family Dollars and Dollar Trees stores will join them.
Reasons Behind the Layoffs and Relocations
While Walmart will continue to allow a small portion of staff to work remotely part-time, Morris explained that they will be expected to work from the principal corporate offices.
The CPO went on to explain the reasoning behind the recent layoffs. “We believe that being together, in person, makes us better and helps us to collaborate, innovate, and move even faster,” Morris said. “We also believe it helps strengthen our culture as well as grow and develop our associates.”
Support for Those Affected by the Change
Walmart’s Chief People Officer, Donna Morris, stated that the retail store is trying to step up efforts to streamline its personnel workforce and cut costs.
In the public message, Morris stated, “Although the number of positions lost is small in percentage, we are focused on supporting each of our associates affected by these changes,” (via GistFest).
Walmart Dedicated to Supporting Former Associates
Speaking on those affected by the playoffs, Morris said that while the number of jobs cut “is small in percentage, we are focused on supporting each of our associates affected by these changes.”
She continued, “We have had discussions with associates who were directly impacted by these decisions. We will work closely with them in the coming days and months to navigate the best path forward.”
Local Government Can Help Walmart Employees
Those facing layoffs are worried about their future, and the local government is believed to be able to help them get back on their feet.
This is through initiatives such as potential retraining programs or job placement services. It could also include offering them skill development courses and helping them financially until they have found a new job.
Walmart Is Competing Against Amazon
In the last few years, Walmart has launched its Walmart+ program to go against its competitor, Amazon, with its Amazon Prime program.
Like Amazon Prime, Walmart+ offers subscribers a number of perks, including free shipping, store delivery, and a Paramount+ streaming subscription. These all cost just $98 per year, whereas an Amazon Prime subscription costs $139 per year.
Walmart and Amazon Want a Large Share in the Market
The competition between Walmart and Amazon is due to their both wanting a large share of the market, so they are doing anything they can to attract more customers to their stores or order from them online.
This includes offering various deals, especially with Walmart launching its Walmart+ week, which mirrors Amazon’s Amazon Prime week. Walmart hopes this week will drive customers away from Amazon so that it can have more control of the market.
Getting Workers Back to the Office
Walmart, currently the largest employer in the United States, is one of many companies in the nation trying to get the majority of its workers to return to work.
According to Business Insider, the return-to-office mandate “is a way of getting rid of employees without conducting mass layoffs.” Many refer to this method as quiet firing, as it is a subtle way to make job roles less appealing and ultimately motivate workers to quit.
Retail Giant Axes Health Care Business
Walmart’s announcement of concurrent layoffs comes just a few days after the retail giant revealed it planned to shut down its virtual healthcare service, which began in 2019.
In a statement released to the public, Walmart revealed its plans to close all 51 healthcare centers as it realized that it was “not a sustainable business model.”
Senior Analyst Suggests Restructuring Is Occurring at Walmart
During an interview with USA Today, Blake Droesch, a senior analyst covering retail and e-commerce at research firm eMarketer, suggested the layoffs and closure of Walmart’s health program were connected.
Droesch theorized the closure of the health clinics could be “part of a restructuring that would allow Walmart to allocate additional resources to more profitable revenue streams, like advertising and fulfillment.”
Walmart Aims to Prioritize Corporate Strategy
According to Droesch, Walmart is hard at work prioritizing its corporate strategy, which also included closing several stores located in underperforming regions. They also acquired Vizio, a smart TV manufacturer.
“Walmart has also been laser-focused on creating alternative revenue streams that go beyond its retail business,” Droesch said.
Walmart Is Making Major Changes
Throughout 2024, Walmart is committed to making nine major changes throughout its stores. Some of these include digital shelf labels, expanding its in-home delivery, and expanding its drone delivery service.
Other ways it will implement changes include an AI personal shopping assistant, low-cost groceries, on-demand early morning delivery services, and the removal of self-checkout machines.
Walmart Aims to Increase Entry-Level Positions
Droesch alluded to Walmart’s apparent restructuring of the business in an attempt to increase entry-level positions. He said, “By reducing their corporate headcount, the retailer could allocate more resources to its store and warehouse staff.”
“These jobs are the true lifeblood of the retail business, and Walmart has prioritized workforce retention in what has become an increasingly competitive labor market.”
