Walmart cuts in-store back-office jobs
Walmart is eliminating approximately 7,000 accounting and invoicing positions inside its U.S. stores. The move is seen as either a shift to place more employees in customer-facing roles, a money-saving move, or a bit of both.
The Wall Street Journal first reported on the job realignments on Thursday. The decision follows a test earlier this summer. Walmart has about 1.4 million U.S workers.
The in-store jobs being eliminated involve tasks such as managing an individual store’s daily cash flow and processing claims from manufacturers delivering goods directly to stores. Those tasks will be handled at the corporate office or through automation.
A Walmart spokesman told Reuters the job eliminations are designed to bring more associates to the sales floor. Affected employees will be offered jobs in other parts of the store, although their pay may increase or decrease depending on the job.
The move comes as Walmart has committed to investing $2.7 billion in training and raising wages to improve customer service. The retailer increased starting pay to $9.00 last year and $10 earlier this year. At its June annual shareholder meeting, officials raved about how customer satisfaction scores had increased 79 straight weeks. Walmart just reported its eighth quarter in a row of U.S. same-store sales gains.
Bodies at the store level are also needed to support curbside pickup, ship-from-store, ship-to-store and other omnichannel initiatives.
On the other hand, the in-store back-office positions are some of the highest paid hourly workers at the store level and the discount giant may be looking for ways to offset the rising costs for training, higher pay and new hires and other investments. Walmart is investing heavily digital to better compete with Amazon, including rolling out the Walmart Pay app and acquiring Jet.com for $3.3 billion.
Joel Bines, co-head of AlixPartners LLP’s retail practice, told the Journal, “Any time one expense line goes up, you are likely to see a reduction in a corresponding expense line.”
- Wal-Mart to Cut 7,000 Back-Office Store Jobs – Wall Street Journal
- Wal-Mart to cut 7,000 U.S. store back-office jobs – Reuters
- Wal-Mart Will Relocate 7,000 Back-Office Workers at U.S. Stores – Bloomberg
Discussion questions: How confident are you that Walmart can eliminate many of its in-store administrative jobs without repercussions? What do you think motivated the move?