The exterior of a Walmart store on August 23, 2020 in North Bergen, New Jersey
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Walmart has begun laying off corporate employees, the company confirmed Wednesday, about a week after it cut its profit outlook and warned that consumers were pulling back on discretionary spending because of inflation.
In a statement to CNBC, the retail giant described the layoffs as a way to “better position the company for a strong future.”
Anne Hatfield, a Walmart spokeswoman, declined to say how many workers would be affected and which divisions experienced layoffs. She said Walmart is still hiring in parts of its business that are growing, including supply chain, e-commerce, health and wellness, and advertising sales.
“Buyers are changing. Customers are changing,” she said. “We’re doing some restructuring to make sure we’re in line.”
The corporate layoffs were first reported by The Wall Street Journal.
Walmart is the nation’s largest employer, with nearly 1.6 million workers in the US. The company, seen as a drag on the country’s economy, spooked investors on July 25 when it lowered its outlook for quarterly and full profit guidance. The warning had a chilling effect on the retail sector, dragging down the stocks of companies including Macy’s and Amazon and causing an explosion over the health of the American consumer.
Walmart said at the time that while shoppers were spending more on essentials like groceries and fuel, they were passing up high-margin merchandise, including apparel. It said it will have to lower prices to sell more of these items, especially as excess inventory piles up in its stores and those of competitors such as Target and Bed Bath & Beyond.
Later that week, Best Buy lowered its profit and sales forecast, saying it was seeing softening demand for consumer electronics — big, inexpensive purchases that some shoppers may put off.
As recession worries persist, the US labor market appears increasingly segmented.
US job openings fell sharply in June, but the labor pool remains tight, with 1.8 job openings per available worker. Many of the companies that thrived during the pandemic, including Walmart’s main competitor, Amazon, have begun to cut back on hiring.
Amazon’s headcount shrank by 99,000 people to 1.52 million employees globally at the end of the second quarter. The company’s workforce almost doubled in size during the Covid health crisis as it scrambled to keep up with customer demand for groceries, puzzles and more online.
That reduction was largely due to the downturn, Amazon Chief Financial Officer Brian Olsavsky said on a call with reporters after the company’s second-quarter earnings report last week.
Other companies, including Shopify and Robinhood, have also recently announced layoffs. And still others, like Facebook parent Meta and Google parent Alphabet, have said they will slow hiring or focus on more productivity with current workers.
It is unclear whether Walmart has also slowed the pace of hiring in stores and warehouses, which would allow the loss to reduce its workforce. The company will report its quarterly earnings on August 16 and is likely to provide an update on the total number of employees.
– CNBC Annie Palmer contributed to this report.
