Walmart, the world’s largest retailer, has said it will cut hundreds of jobs in its US corporate department and has called for remote workers to return in-person.
The latest announcement from Walmart is part of a restructuring plan that the company’s Chief People Officer (CPO) says will allow the workforce to “move even faster” on innovation and collaboration.
Walmart Issues Memo
Last month, NPR reported that Walmart had issued a company-wide memo announcing significant layoffs at the retailer’s campus offices over the following month.
The announcement from the popular retailer will impact hundreds of corporate positions within the company and is part of a relocation plan being ushered in by the company.
Closures Begin As CPO Speaks Out
Walmart’s Chief People Officer (CPO), Donna Morris, has issued a memo addressing the layoffs that have caused concern among some employees.
Morris confirmed that changes in “some parts of our business will result in a reduction of several hundred campus roles.” Her statement 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.
Some Hope For Endangered Employees
In cases where stores are set to close, Walmart workers are eligible to transfer to another location.
However, in spite of the retailer’s 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.
Million Dollar Losses
With concerns around theft reaching record highs, Walmart said that some stores “lose tens of millions of dollars a year, and their annual losses nearly doubled in just the last five years,”
In a press release, they added, “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.”
Threat of Higher Prices Looms
Speaking to CNBC’s “Squawk Box”, Walmart CEO Doug McMillion said Walmart will be increasing prices and security measures in stores to help limit losses.
“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,” McMillion said.
Walmart Says No To Remote Work
During the announcement, Walmart announced its plan to bring almost all of the company’s remote workers back to its primary offices.
Remote workers 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.
Support Promised For Former Associates
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.”
Morris added, “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.”
Walmart Axes Health Care Business
Walmart’s announcement of layoffs arrives just days after the company said 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 they now believe that it is “not a sustainable business model.”
The Start of Restructuring
Blake Droesch, a retail and e-commerce analyst at eMarketer, believes the layoffs and closure of Walmart’s health program were connected.
He suggested that 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.”
