Walmart Implements Corporate Layoffs Despite Seeing Strong Demand During COVID-19
As other companies furloughed workers during the coronavirus crisis, Walmart added 200,000 employees across its stores and distribution centers. But now, the Bentonville, Ark.-based retailer is making cuts.
As first reported by Bloomberg, the company has laid off hundreds of workers across its store planning, logistics, merchandising and real estate divisions. What’s more, Walmart reportedly plans to reorganize its U.S. stores by consolidating divisions and getting rid of some managerial positions. The retailer did not reveal how many workers will be impacted by the layoffs. It plans to publicly share more details after notifying employees.
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The changes come amid an ongoing effort by the big-box chain to consolidate its brick-and-mortar and e-commerce operations and boost its online business — which experienced growth of 74% during the three-month period ended May 1. Walmart announced in February that it was combining its online and store buying teams to eliminate pricing conflicts, and it has folded the Jet.com teams into its own online business. Additionally, the company has plans to soon roll out an Amazon Prime-esque subscription service, called Walmart+. The changes also may be a signal that Walmart doesn’t plan to open many new outposts as it shifts its focus to e-commerce — and thus does not see a need for as many employees on its store planning and real estate teams.
As they deal with the fallout from the COVID-19 crisis, numerous companies have been reducing their corporate headcount. Nordstrom has laid off more than 500 employees in its home state of Washington, while Men’s Wearhouse parent Tailored Brands is cutting around 20% of its corporate workforce. Meanwhile, Victoria’s Secret owner L Brands announced just this week that it would eliminate roughly 850 roles as part of plans to reduce annual costs by $400 million.
But unlike other retailers — which had to grapple with months-long store closures and decreased discretionary spending — Walmart saw heightened demand amid the coronavirus pandemic as panicked shoppers loaded up on household essentials. For the first quarter ended May 1, the chain recorded a 3.9% rise in profits to $3.99 billion, or $1.40 per share. On an adjusted basis, earnings per share were $1.18 — exceeding market watchers’ bets by one cent. Revenues for the period jumped 8.6% to $134.62 billion, beating analysts’ forecasts of $130.31 billion. Walmart’s next earnings report is expected Aug. 18.
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