Walmart implements layoffs at e-commerce facilities, hundreds of workers affected
As other retailers prepare for a challenging year ahead, Walmart - the largest private employer in the US - is also making tough decisions by letting go of hundreds of employees at its e-commerce facilities.
In response to the anticipated sales decline faced by many retailers due to inflation and the shift back to services, the company is reducing its workforce, reported Reuters. The boom in spending during the Covid pandemic has subsided, resulting in reduced sales of goods.
According to a spokesperson for Walmart, the company is downsizing its workforce at fulfilment centres. Walmart stated that the cuts were made to ensure readiness for the future requirements of customers.
“This decision was not made lightly, and we’re working closely with affected associates to help them understand what career options may be available at other Walmart locations,” the statement said.
In response to Reuters' inquiry, the company confirmed that it would be cutting several hundred jobs at five different fulfilment centres in Pedricktown, New Jersey; Fort Worth, Texas; Chino, California; Davenport, Florida; and Bethlehem, Pennsylvania. The reason given was a decrease or removal of evening and weekend shifts, which resulted in a downsizing of the workforce.
As per a notification filed with the state, roughly 200 employees at the facility located in southern New Jersey will be impacted.
On Monday, Amazon, Walmart's e-commerce competitor, revealed that it would lay off 9,000 employees, having already cut 18,000 jobs in January. Additionally, due to the shift of some online sales back to physical stores, the company has halted the opening of new warehouses.
Target, another competitor, intends to reduce total costs by up to $3 billion in the next three years. However, the company's CFO Michael Fiddelke stated at an investor day in February that investments in the team and guest experience will not be reduced.
Walmart has projected a slower rate of sales growth and a decline in profits in the upcoming fiscal year. In the previous month, the company revealed that it estimates the same-store sales of its U.S. business to increase by 2% to 2.5%, exclusive of fuel. This is in contrast to the 6.6% growth experienced in the preceding fiscal year.
For the fiscal year, Walmart is anticipating adjusted earnings per share, exclusive of fuel, to fall between $5.90 and $6.05. This is a decrease from the adjusted earnings per share of $6.29 recorded in the prior fiscal year.
While the peak pandemic period saw a higher growth rate, online sales have continued to expand at a slower rate. In the latest fiscal year, ending January 31, e-commerce sales for Walmart's US operations increased by 12%. This is in contrast to the growth rate of 11% in fiscal 2022 and 79% in fiscal 2021.