Source: Walmart tech worker recruitment video
Walmart is closing tech hubs and bringing IT workers back to the office
Walmart is closing technology hubs in Austin, TX, Carlsbad, CA, and Portland, OR, and requiring workers to relocate to primary office locations in San Bruno, CA, and at the retailer’s headquarters in Bentonville, AR.
Workers affected by the decision were notified last week in a memo from Suresh Kumar, Walmart’s global chief technology officer, reports The Wall Street Journal. The retailer will pay relocation expenses for workers affected by the decision and give severance to those who choose to stay put.
Relocating workers are being asked to return to offices two days a week, although some will be allowed to continue working on a full-time remote basis. Workers at Walmart’s headquarters have worked in-person five days a week going back to last year, according to the Journal.
Robert Munroe, Walmart’s director of global communications, told Reuters, “Everything is variable; there is no set date that [this transfer] must be completed.”
It’s not clear at this point if Walmart’s decision to close the three hubs is its one and only move or the beginning of a major change. The retailer currently operates 11 tech hubs in the U.S., including the three being closed, and six others outside the country.
Walmart has allowed its corporate technology staff more leeway when it comes to returning to the office. The Journal reports on a LinkedIn post written by Mr. Kumar in 2020 when he addressed the topic. “We’ve decided that even as restrictions are lifted and other groups in Walmart eventually return to their offices, we will take our time, and think about how we can invent the workspace of the future.”
Many companies have decided to bring technology and other office workers back in person as concerns around the dangers of COVID-19 ebb. Business Insider last month developed a list of companies that now require employees to report to their offices on at least a part-time basis. Included on the list were Apple, Citigroup, Disney, Goldman Sachs, Google, JPMorgan, Salesforce, Starbucks, Twitter and Uber.
A ResumeBuilder.com survey of 1,000 business leaders found that 90 percent plan to require employees to return to the office at least some of the time in 2023. Twenty-one percent plan to separate from workers who refuse to come back to work in person.
- Walmart to Close Three Tech Hubs, Tells Tech Staff to Return to Offices – The Wall Street Journal
- Walmart to close three U.S. tech hubs, relocate staff – Reuters/MSN
- Here’s a list of major companies requiring employees to return to the office – Business Insider
- 9 in 10 companies will require employees to work from office in 2023 – ResumeBuilder.com
Discussion Questions
DISCUSSION QUESTIONS: Will Walmart’s decision to close three tech hubs, relocate workers and require them to report to the office at least twice a week increase productivity within its IT group? What effect, if any, do you think it will have on Walmart’s tech worker recruiting and retention efforts?
Poll
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Ken Morris
Managing Partner Cambridge Retail Advisors
Ken Lonyai
Consultant, Strategist, Tech Innovator, UX Evangelist
There will certainly be a short-term impact on the employees affected by these changes, but it’s simply a reshuffling in the grand scheme of things. Walmart burnished its tech credibility by opening these tech hubs, and now it has to walk back this narrative somewhat. However overall, this change doesn’t mean that Walmart is no longer interested in tech innovation, it merely means that it’s doing it in a different way.
Measuring IT productivity is no easy task especially on the operations side of the house. However requiring workers to be in the office two days a week and allowing some to remain remote doesn’t sound like they’re trying to solve a productivity problem (yet). Ultimately, there is productivity in IT and elsewhere that is dependent on or improved by in-person interaction so I believe that the trend to return to the office will continue and I don’t think it will affect employment as much as some predict.
I don’t see this as increasing productivity — more like having the opposite effect. IT is a project-driven department with a set of tools that allow collaboration and transparency. Many commuters spend 2+ hours a day on their commute and have grown accustomed to the work-from-home environment. Some have purchased homes outside the normal commute as well. This is a hard pill to swallow and will make recruiting that much harder. I’m not sure that everyone’s dream of “the workspace of the future” will be in a cubicle in Bentonville, Arkansas. Let the rush to San Bruno begin! (Or keep working from home and be more productive.)
The housing costs in San Bruno are about the highest in the country; despite all the talk of tech layoffs, real estate in the Bay Area continues to be white-hot. I’m sure the pay is not going up to compensate someone from Portland for the relative loss of home equity.
This is fascinating. There is some data (haven’t seen it lately, or I’d cite it) that says a lot of the benefits of outsourcing are lost because of communication issues.
I think a hybrid environment is right for tech teams. Get your tasks, go home and do them, and then come back in to review results.
The choice between Bentonville and California is an interesting one. Both have things to recommend and both have downsides.
I think if Walmart pays enough, it will do fine. It’s a great resume builder, for one thing.
Wait — some workers must relocate, and once they’ve moved they can continue to work remotely full time? And other relocated workers only have to come to the office two days a week? I moved my family several times over the course of my career and it is no small endeavor for a family to go through. Having said that, it sounds like Walmart is being fair by paying either moving expenses or severance for those who don’t want to move. Some of the short term details might not mesh, but I’m going to trust that Walmart has a long term plan to achieve the in-office/remote work balance that best serves both the business and the employees.
I saw the same paradox.
Walmart may be gambling that the recent wave of tech layoffs will convince its IT workers to relocate from Austin or Portland to Bentonville, Arkansas. (Or to hire from the pool of newly available tech experts.) Sorry, but I don’t see it happening; the attractions of working remotely (at least part of the time) in a high-demand city like Austin are too much to overcome.
Moving from 11 to eight tech hubs hardly raises red flags about Walmart’s technology commitment. The considerable cost (relocation or severance) suggests Walmart has thought this through. They certainly believe that more people working face-to-face will increase productivity. Tech isn’t a matter of workers sitting in cubicles. Like other development processes, tech is all about collaboration. Apple and Google have emphasized this for decades.
Recruitment? Walmart will have the same challenges or successes with tech workers as other companies. Even with the layoffs, it is all about big bucks.
Like many of my other colleagues, this move strikes me as being less about productivity and more about an overall IT reorganization (cost reductions/hub alignment) to maximize collaboration and innovation. I’ve been to Bentonville many times and love it, but the number of Silicon Valley IT workers that Walmart is going to move to Bentonville is not going to be on the high side. Many of these West Coast associates will likely stay on the coast, take the severance and find other employers. That said, Walmart doesn’t have an issue with hiring great people. Working for the largest retailer in the world carries significant resume cachet!
I am surprised that Walmart is doing this, but you are seeing a lot of companies that are requiring more in-office time now. I am guessing they think they can get the same information in a more central hub than these centers. My hope is that they take care of all of the team members in this move.
Any time there is a change in policy and working environments productivity is impacted. Employees with local roots are unlikely to relocate, their projects will stall and their expertise is permanently lost.
This is ALWAYS a clear insight into how weak the company/department’s management is. (I have to add this topic to my podcast.)
Jamie Dimon, CEO of JPM, ranted about having people return to the office or they weren’t serious employees or something. That’s a load of… On the contrary and as Walmart is signaling, they have weak management that likely can only maintain control by direct line of sight. Give people the room to perform and if they are qualified people, they will. Displaying distrust for their skills and work ethic will only backfire in time. Right now with a tight labor market, more draconian management tactics can be leveraged, but it will create undercurrents of disdain and less productivity. When the job market is better, it will reap what it sowed.
With today’s technology, there is no compromise communicating and interacting, even without a water cooler. The removal of commute anxiety and the personal work surroundings, for employees that want to work remotely, is refreshing and motivational.
A manager that can’t provide leadership and drive performance can’t do it in person any better than remotely. This is a big tell as far as Walmart’s IT management and/or C-level management goes.
I wonder if the cutback in tech (over 100,000 eliminated) figured into their decision. Is this their way of doing some cutbacks in tech?
Walmart doesn’t seem to have a challenge attracting top talent, so the risk of alienating some employees by forcing them to move and come to the office twice a week may not be significant. With several marquee tech companies laying off staff, there are tech workers available to recruit. The biggest challenge is that now everyone will be thrilled to live in Bentonville or San Bruno.
This seems like a limited strategic decision on Walmart’s part, as it affects workers at just three of its eleven tech hubs. Trimming the sails, so to speak.
That said, it seems to me there is a cultural tension between workers who must show up for their shifts in the stores and those who code from home for three times the pay. Walmart (and most other large retailers) need to handle this with care.
Tech staff need to be team players too and required periodic office visits are a counter for isolation. I expect the impact on individual productivity will be minor.
I seldom question companies’ specific decisions about what can be broadly called micromanaging, and this is a good example of why: how can we possibly know (better than Walmart) what information they had available, what their goals are, or what their decision making process was? Sure we can all snicker at the choice of Bentonville vs Austin — or Carlsbad … surfs up, bro! — but they seem to have survived all these years down on the farm. I’m sure there are some programmer snowflakes who will reject the move, but there are plenty more out there who won’t.