Walmart has started making corporate employee reductions, the business announced on Wednesday, about a week after it cut its profit forecast and warned that consumers have cut back on discretionary spending owing to inflation.
The retail giant explained the layoffs as a strategy to reduce costs in a statement to CNBC- “better position the company for a strong future.”
A representative for Walmart named Anne Hatfield declined to indicate how many employees would be impacted or which departments had been slashed. In areas of the business that are expanding, such as supply chain, e-commerce, health and wellness, and advertising sales, she claimed that Walmart is still employing.
“Shoppers are changing. Customers are changing,” she said. “We are doing some restructuring to make sure we’re aligned.”
The Wall Street Journal was the first publication to report on the business layoffs.
Walmart employs roughly 1.6 million people in the United States, making it the largest employer in the nation. When the corporation, which is regarded as a leading indicator of the state of the economy in the country, lowered its projection for quarterly and annual profit guidance on July 25, it alarmed investors. That warning had a chilling impact on the retail industry, driving down the stock prices of firms like Macy’s and Amazon and igniting concerns over the state of the American consumer.
At the time, Walmart said that consumers were skipping over high-margin goods like clothing as they spent more money on essentials like groceries and gas. Given the abundance of inventory in its stores as well as those of other retailers like Target and Bed Bath & Beyond, it said that price reductions would be necessary in order to sell more of those products.
Later that same week, Best Buy lowered its profit and sales projection, citing weaker demand for consumer electronics—expensive big-ticket items that some buyers may be able to put off buying.
The American employment market appears to be becoming more divided as concerns about the recession persist.
While there were far fewer job opportunities in the United States in June, there were still 1.8 open positions for every worker who was available. Many of the businesses that prospered during the pandemic, including Amazon, Walmart’s main rival, have begun to reduce staff.
At the conclusion of the second quarter, Amazon had 1.52 million employees worldwide, down 99,000 from the previous quarter. In order to keep up with client demand for groceries, puzzles, and other online items amid the Covid health crisis, the company’s workforce nearly doubled in size.
In a conference call with reporters following the release of the company’s second-quarter earnings report last week, Amazon Chief Financial Officer Brian Olsavsky stated that the reduction was mostly caused by attrition.
Robinhood and Shopify are two additional businesses that recently announced layoffs. Others, like the companies that own Facebook and Google, have stated that they will cut back on hiring or concentrate on increasing productivity among their current workforce.
Uncertainty exists on whether Walmart has decreased the rate of hiring at its warehouses and stores, which would allow attrition to reduce its staff. On August 16, the company will release its quarterly profits, and it is anticipated that they will include an update on total employee count.