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Walmart, the largest private employer in the United States, is cutting hundreds of jobs at its e-commerce facilities nationwide, joining other retailers in preparing for a challenging year ahead.
As retailers anticipate flat or decreasing sales, Walmart is reducing its workforce. This is due to the impact of inflation and a shift in consumer spending from goods to services following the pandemic-induced spending surge.
On Monday, Amazon, Walmart’s e-commerce rival, declared that it would lay off 9,000 employees. This came after 18,000 layoffs in January. Amazon has also postponed the opening of new warehouses and closed down existing ones due to a shift in consumer behavior, with some customers returning to physical stores. Similarly, Target, another Walmart competitor, plans to reduce overall costs by up to $3 billion over the next three years. However, the company’s CFO, Michael Fiddelke, stated during an investor day in February that the company would continue to invest in its team and customer experience, and will not withdraw from those areas.
As per Reuters’ report, Walmart has confirmed that it will be laying off employees at its fulfillment centers. The company explained that this measure was taken to align with the future needs of customers. A spokesperson for Walmart added that the decision to cut jobs was not easy and that the company is providing assistance to affected associates to explore career opportunities at other Walmart locations.
According to a report by Reuters, Walmart has officially announced the elimination of several hundred jobs at five of its fulfillment centers located in Pedricktown, New Jersey; Fort Worth, Texas; Chino, California; Davenport, Florida; and Bethlehem, Pennsylvania. The company clarified that the workforce reduction was necessary due to a decrease or elimination in evening and weekend shifts. As per a notice filed with the state, roughly 200 workers at the southern New Jersey facility will be impacted by the job cuts.
Walmart is expecting a deceleration in sales growth and profits in the upcoming fiscal year. In a statement released last month, the company projected that its U.S. business’s same-store sales would increase by 2% to 2.5%, excluding fuel. This forecast represents a significant drop from the 6.6% growth rate achieved in the previous fiscal year.
For the upcoming fiscal year, Walmart foresees a range of $5.90 to $6.05 for its adjusted earnings per share, excluding fuel. This forecast is lower than the previous fiscal year’s adjusted earnings per share of $6.29.
Despite the pandemic’s peak, the company’s online sales have continued to increase, albeit at a slower pace. Walmart’s U.S. e-commerce sales climbed by 12% in the latest fiscal year, which concluded on January 31. This growth rate is slightly higher than the 11% increase reported in the fiscal year 2022 but significantly lower than the 79% spike recorded in the fiscal year 2021.
