Walmart Cutting Hundreds of Jobs In Latest Round of Layoffs
Walmart (WMT) is about to eliminate hundreds more jobs at headquarters and in regional offices in its latest move cut down on costs and protect its profits.
The discount retailing giant will cut most those of jobs before January 31, the end of its current fiscal year, according to the Wall Street Journal, which first reported the news on Tuesday, citing unnamed people familiar with the situation. A good chunk of the job cuts will be in Walmart’s human resource department at headquarters and in regional offices, rather than stores, given belief among some top executives that such functions can be filled by consultants, according to the report.
“As we’ve previously shared, we are always looking for ways to operate more efficiently and effectively,” Wal-Mart Stores spokesman Greg Hitt told Fortune in an email statement that stopped short of confirming the job cuts.”While we continually look at our corporate structure, we have not made any announcements.” The cuts are small in number in relation to the size of Walmart’s headquarters staff in Bentonville, Arkansas, which numbers 18,000 workers. (Nationwide, Walmart has 1.4 million workers, making it the largest private U.S. employer.)
But the move is the latest by Walmart to be more efficient in its home and regional office management. And it comes as Walmart is feeling the pinch on its profit margins from wage hikes to store workers ($2.7 billion in the last two years) and enormous investments in e-commerce to better compete with Amazon.com (AMZN) and other online stores. At its annual meeting with the financial community in October. Wal-Mart Stores forecast per-share adjusted earnings in fiscal 2018 (which starts Feb. 1) would be flat compared with fiscal 2017.
In September, the company began cutting some 7,000 accounting and invoicing positions within its U.S. stores to redeploy workers to improve in-store customer service, which has been garnering better and better scores, key for Walmart to keep its streak of eight quarters of comparable sales going. In 2015, the company cut 450 jobs at its headquarters to become nimbler.
The latest job cuts comes as a number of other retailers slash payrolls too. Macy’s (M) said last week it was cutting 10,000 jobs and closing 68 stores this year, while The Limited this weekend laid off 4,000 workers as it closed all its stores but kept its web site active.
In October, Walmart said it would allocate more of its annual capital expenditure budget to beefing up e-commerce, including tech in stores, its shopping and payment apps as well as its web site, and less on stores openings, which will be fewer going forward. Last year, Walmart spent $3.3 billion on e-commerce startup Jet.com and shuttered its 153 small-format Walmart Express chain.