Walmart Is Eliminating Many Corporate Jobs

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WMT
t is tightening its belt. Hundreds of workers in store planning, logistics, merchandising and real estate have been laid off as the company is looking to reduce some expenses where it believes it can be done without hurting overall business results. This late breaking news was reported first by Bloomberg Thursday afternoon.

John Furner, President of Walmart U.S., will speak to the action after all Walmart associates have been notified. However, Bloomberg received a message from Walmart saying, “We are continuing our journey to create an omni-channel organization within our Walmart U.S. business and we’re making some additional changes this week”. The company also said that its goal is to increase “innovation, speed, and productivity”.

Walmart is in the midst of a multi-year streamlining effort to consolidate its store and on-line divisions. As a matter of fact, it has renamed its stores “business units” and will designate the Supercenters as three business units separate from one for the smaller Neighborhood Markets, which are the size of a traditional grocery store. Back-office associates’ jobs are now under a magnifying glass; buying functions will be consolidated and other back-office work will be reassigned.

Walmart has had excellent sales results during the pandemic as customers have regularly shopped in its stores for essentials and groceries. Same store sales jumped 10% in the first quarter, and the average ticket increased 16% in that period. Internet sales rose a whopping 74% at the same time. In order to service the increase in customer traffic during the pandemic environment, the company has hired 400,000 additional people. And as I commented recently, it has awarded front-line associates three rounds of bonuses that have totaled $1.1 Billion.

Elimination of corporate positions is not new these days; such decisions have been announced by Macy’s
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, Nordstrom
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’s, Nike
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, L. Brand
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s, and others. Everybody is now looking at TJX company (parent of T.J.Maxx, Marshall’s and other stores) as a role model for a tight management structure that does very well. It is important to note that associates on retail selling floors have often been increased as retailers try to enforce social distancing, wearing masks, and obeying one-way traffic. Such activity to operate during the pandemic has added to costs.

John Furner, who took over the Presidency of Walmart U.S. last November, is making decisive decisions which I like. I think he is a man to watch as he develops a new operating concept for Walmart and renews its growth. The emphasis is on speed, quicker decisions, streamlined communications through fewer executive levels, and an emphasis on low prices. Ultimately, the customer will be the winner.