Walmart, the world's largest retailer, announced significant changes to its corporate workforce on Tuesday, revealing plans to cut hundreds of jobs and relocate many remote employees to larger office hubs. The move, outlined by Chief People Officer Donna Morris in a memo to employees, aims to enhance collaboration, innovation, and operational efficiency.
"Changes in some parts of our business ... will result in a reduction of several hundred campus roles," Morris stated in the memo. She emphasized the importance of in-person collaboration for fostering a stronger corporate culture and driving business growth. "We believe that being together, in person, makes us better and helps us to collaborate, innovate and move even faster," Morris said. "We also believe it helps strengthen our culture as well as grow and develop our associates."
The layoffs, while significant, represent a small percentage of Walmart's extensive workforce, which includes about 1.6 million employees in the United States alone. However, the impact on those affected is profound. "We are focused on supporting each of our associates affected by these changes," Morris said, promising to work closely with impacted employees to navigate their next steps.
In addition to job cuts, Walmart is asking employees from smaller offices in Atlanta, Dallas, and Toronto to relocate to larger hubs. "Most relocations will be to our Home Office in Bentonville, but some will be to our offices in the San Francisco Bay Area or Hoboken/New York," Morris detailed. This shift is part of Walmart's broader strategy to consolidate its operations and drive efficiencies by centralizing its workforce in key locations.
Walmart's decision comes amid broader efforts to restructure and prioritize more profitable areas of the business. Recently, the company announced the closure of its virtual health care service and all 51 Walmart Health centers, citing an unsustainable business model. This move, along with the latest workforce reductions, suggests a strategic realignment focused on bolstering core business areas like advertising and fulfillment.
Blake Droesch, a senior analyst covering retail and e-commerce at eMarketer, interpreted these changes as a reallocation of resources. "The timing of the corporate layoffs after the announced closing of health clinics suggests they may be part of a restructuring that would allow Walmart to allocate additional resources to more profitable revenue streams," Droesch told USA TODAY.
In addition to these internal shifts, Walmart has been actively closing underperforming stores while opening new ones and remodeling existing locations. In February, Walmart acquired Vizio, citing the smart TV maker's advertising-supported streaming video business as a potential profit-making fit with its Walmart Connect advertising platform.
CEO Doug McMillon highlighted these strategic priorities during a recent earnings call. "We're investing in remodels and supply chain automation to improve the customer experience and increase productivity. These things are going well," McMillon told investment analysts.
The consolidation of office locations and the push for more in-person collaboration mark a significant shift from Walmart's previous endorsement of remote work during the pandemic. In 2021, Suresh Kumar, the head of Walmart's global tech operations, had described virtual work as "the new normal" for most tech-related tasks. However, the company has gradually shifted away from this stance, closing three tech offices last year and asking some staff to relocate to central corporate hubs.
Walmart is also in the process of constructing a new headquarters in northwest Arkansas, which it plans to open in phases starting in 2025. The expansive 350-acre campus is designed to accommodate over 15,000 employees across 12 buildings, reflecting Walmart's commitment to a centralized, collaborative work environment.
Brian Jacobsen, chief economist at Annex Wealth Management, suggested that the push for relocation might be a strategic move to reduce headcount without direct layoffs. "Giving people a choice to relocate to a hub isn't much of a choice. It's more of a choice of whether to quit or not," Jacobsen said.
