Walmart has confirmed plans to lay off hundreds of workers at five e-commerce fulfillment centers across the United States, according to Reuters.
Employees at facilities in Pedricktown, New Jersey; Fort Worth, Texas; Chino, California; Davenport, Florida; and Bethlehem, Pennsylvania, have been given 90 days to find new jobs within the company. A Walmart spokesperson cited the reduction or elimination of evening and weekend shifts as the reason behind the layoffs.
These job cuts come amid growing concerns about a potential recession in the US economy, leading to retailers announcing 17,456 job cuts so far in 2023, compared to 761 in the same period last year, according to a March report by Challenger, Gray and Christmas. Walmart's decision to reduce its workforce mirrors that of its e-commerce rival Amazon, which recently announced 9,000 job cuts, following 18,000 layoffs in January.
The Walmart spokesperson confirmed that the company would work closely with affected associates to help them find jobs at other locations. During the 90-day period, impacted workers will receive pay as they search for positions at other Walmart facilities, including the new high-tech e-commerce distribution centers in Joliet, Illinois, and Lancaster, Texas.
As the largest private employer in the US, with around 1.7 million workers, Walmart has been investing heavily in automation technology in recent years. The company's CEO, Doug McMillon, expressed excitement about Walmart's automation opportunities, with plans to increase investments in automation technology as part of its over $15-billion capital expenditure budget for the year.
Walmart's decision to reduce its workforce comes as the company anticipates slower sales growth and lower profits in the upcoming fiscal year. Walmart's most recent fiscal year saw a 12% increase in e-commerce sales for the company's US business. Although this represents continued growth, it is a slower pace than the 11% growth in fiscal 2022 and the 79% growth in fiscal 2021.
Despite the layoffs, Walmart has stated that workers at the five affected fulfillment centers will be eligible for roles at its 5,000 US stores. The company has been increasingly using these stores as a platform to ship orders directly to customers' doorsteps.
As retailers continue to grapple with economic uncertainty, job cuts in the industry are likely to continue. Walmart's move to reduce its workforce at e-commerce fulfillment centers serves as a reminder of the challenges that lie ahead for the retail sector.