A representative for Walmart confirmed to Reuters that hundreds of employees at five facilities in the United States that fulfil e-commerce orders are being advised to find new employment within the next three months at other Walmart locations.
According to a spokesperson for the company, approximately 200 workers in Pedricktown, New Jersey, as well as hundreds more workers in Fort Worth, Texas; Chino, California; Davenport, Florida; and Bethlehem, Pennsylvania, were laid off as a result of a reduction or elimination in evening and weekend shifts.
The layoffs at Walmart, a retail bellwether due to its size, could be a signal of future instability in the U.S. economy, which many experts think could enter recession this year. Walmart is a retail bellwether because of its size.
According to a survey published in March by Challenger, Gray, and Christmas, shops have already announced 17,456 job cutbacks so far in 2023 due to fears of an impending recession. This number compares to only 761 job cuts over the same time period in the previous year.
Retailers like Amazon, Neiman Marcus, and Lidl are among those slashing employment, the majority of which are in corporate positions.
Walmart said that it has recently changed the number of employees it has so that it can better meet the needs of customers in the future. The company also added that it would work closely with employees who were affected in order to help them find positions at other locations.
According to the spokesperson for the company, affected employees will be compensated for up to ninety days while they look for work at other facilities, such as those located in Joliet, Illinois, and Lancaster, Texas, where the corporation has put up new high-tech e-commerce distribution centers.
Walmart has made significant investments in automation over the course of the past few years. Through partnerships with businesses such as Knapp, Walmart has been able to reduce the number of steps its employees must take to process e-commerce orders from 12 to just five. One location in Pedricktown, New Jersey, for example, has already implemented this change.
During a post-earnings call in February, Walmart CEO Doug McMillon stated that he was “particularly enthused about the automation opportunities we have.” Walmart has plans to raise its expenditures in automation technologies as part of its more than $15 billion capital expenditure budget for this year.
The remarks of the CEO came after the retailer provided a conservative projection for the whole year, which the CFO of the company, John David Rainey, attributed to a significant amount of “trepidation and uncertainty regarding the economic outlook.”
According to the spokesperson, employees who are being let go from the five fulfilment centres will be eligible for roles at any of Walmart‘s 5,000 stores in the United States. These stores are increasingly being used by the company as a platform to ship orders directly to the doorsteps of customers. Walmart employs around 1.7 million people in the United States, making it the largest private employer in that country.
According to an examination of labour government data conducted by Reuters, Walmart did not post a Worker Adjustment and Retraining Notification (WARN) notice for the layoffs in any of its locations apart from Pedricktown in the state of New Jersey. Companies in the United States with 100 or more workers are required to give an advance warning of factory closings and mass layoffs that is at least sixty days in advance through the use of a WARN notice, which is required by U.S. labour law.
The representative for the company stated that the warehouses were continuing to function normally and refrained from using the term “mass layoffs.” According to the corporate spokeswoman, the company did not send a WARN letter for the other locations since it is uncertain about the overall number of employees that will eventually be laid off and rehired.