Walmart is one of the largest companies worldwide in terms of revenue and has its strong influence on the global retail market share. Established in 1962, the company presently operates more than 11,000 outlets and has outlets in 27 countries of the world with a workforce of nearly 1.6 million people in the U.S. alone. Walmart operates at a vast scale and through its procurement muscle has been able to realize economies of scale so that costs remain low and consumers get to enjoy everyday low prices. It has also been able to efficiently manage its supply chain needs which have not only complemented its growth but have also shaped retail industry norms throughout the world.
Being one of the biggest private employers globally, Walmart readily contributes to the improvement of the local economy and offers employment to millions. More than three-quarters of its salaried store managers were promoted from hourly-paid employees, thus portraying Walmart as an industry that plays a big role in mobility. However, there has been criticism about its social responsibility management particularly on employment practices and the effects on national employment tendencies also famously known as the ‘Walmart effect’. Studies show that Walmart led to an employment reduction of 2.7% of the retail employment losses in surrounding communities and that they caused many small businesses to be squeezed out as well as a shift in wages throughout the sector.
It is therefore important to study Walmart's employment change in regard to movement patterns of employment in the entire industry. The research is therefore important to explain how Walmart, being the world’s largest retailer, influences the local labor markets through strategies and presence that depress wages and risks, thus playing an instrumental role in wage stagnation in the retail sector. Besides, Walmart’s firing impacts local economic systems, translating to a decrease in demand for goods and services as well as an influx in people relying on other forms of assistance. These changes in the retail labor market mean that it is necessary to scrutinize Walmart employment trends for assessing effects upon different communities as well as the retail industry as a whole.
Contextual Background: Retail Sector and Employment Trends Since 2020
The Retail Industry at the Start of 2020
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Key Employment Statistics:
In Q3 2020, the United States had 1,045,422 units of retail trade establishments, up by 4,801 from that of Q2 of the same year.
In the retail and commerce sector, the industry share dominates with over 420.5 million jobs across the globe, out of which Asia and the Pacific have acquired about 239 million jobs.
The U.S. retail trade employs over 52 million people or 25% of the total population.
Employment Trends:
Pre-Covid there were already shifts happening within the retail environment and particularly within the movement towards e-commerce.
The pandemic significantly influenced the employment situation in the retail industry but the decline started to stabilize in the second half of 2020.
Due to automation e-commerce is expected to decrease opportunities for retail employees because physical stores need more manpower than virtual ones.
The provisional year had seen the numbers of temporary staff hired by the retail trade on an average of between 530,000 and 590,000 during the holiday season.
The store turnover rate is still high between 60% and 76% because the industry is volatile; employees get paid low wages; and are young.
Impact of the COVID-19 Pandemic on Retail Employment
Immediate Effects on the Retail Sector:
All over the world, as the impact of the pandemic, 800,000 retail job opportunities were shed, in contrast, from 2017 to 2019, 200,000 retail jobs were lost.
Key reasons that contributed to a drastic drop in employment statistics included government directives such as lockdowns, changes in customer buying habits, and closure of operations of non-essential businesses.
Government Lockdowns, Store Closures, and Shifts to E-Commerce:
Lockdown initiatives made many outlets close their physical stores, especially those that offered ‘non-essential’ products and services, hence, promoting increased sales through e-shops.
About 300,000 high-contact service industries, especially courier and warehousing emerged due to the move to online retail.
Employees – also faced large-scale job losses and reduced working hours due to the pandemic, from Walmart and other retailers.
The employees in the retail sector experienced massive job severance; either placed on unpaid leave or dismissed because of the shortened operational days or outright shutdowns due to COVID-19 restrictions.
Measures Taken by Walmart to Address the Pandemic
As for the measures taken due to the pandemic, Walmart Hastened Its Hiring Frenzy, which says that the company planned to hire more than 150,000 workers; however, by April 2020, it was able to hire over 250,000 new employees.
The company adopted new measures in the recruitment policies to help recruit employees within 24 hours due to increased demand for essential products.
Walmart took several measures with a focus on the safety of its customers and employees; measures like installation of plexiglass barriers, floor markers to keep the required physical distance, increased focus on sanitation and cleanliness, and many others.
PPE was issued to the employees while all stores were closed at night for deep cleaning.
Balance Between Layoffs and Hiring:
While many retailers faced layoffs due to declining sales, Walmart focused its hiring on stores and fulfillment centers, where demand was highest for essential goods.
Walmart's hiring strategy helped absorb some of the workforce from sectors severely impacted by the pandemic, providing temporary positions to those affected by layoffs in other industries.
Analyzing Walmart Layoffs: 2020 to Present
Timeline of Major Layoff Announcements and Restructuring Efforts at Walmart (2020 Onward)
2020:
April: Walmart experienced a hiring surge, adding over 250,000 employees due to increased demand during the COVID-19 pandemic. However, this period also sparked discussions on potential restructuring as the retail landscape evolved.
2021:
February: Walmart announced layoffs in its e-commerce division as part of a strategy to streamline operations. The focus was on enhancing efficiency through automation, although specific numbers were not disclosed.
2022:
August: Walmart laid off around 200 corporate employees following a reduction in profit forecasts due to inflationary pressures. This restructuring aimed to optimize operations and increase investments in e-commerce and technology.
2023:
March: Walmart filed WARN notices indicating layoffs of hundreds of employees in corporate roles as part of a strategy to consolidate operations and improve efficiency in response to changing market conditions.
2024:
May: Walmart announced plans to cut several hundred corporate jobs and required remote workers to relocate to its Bentonville, Arkansas headquarters or face layoffs, aiming to strengthen company culture and team collaboration.
June: WARN notices revealed significant layoffs, including 1,472 employees in Texas and several hundred in California, primarily affecting call center roles as Walmart continued its corporate restructuring efforts.
Summary of Affected Areas
Corporate Roles: The majority of layoffs have targeted corporate positions, particularly remote workers and employees in technology, marketing, and management as Walmart consolidates its workforce into central hubs.
E-commerce and Technology: Layoffs have also impacted roles in the e-commerce division as Walmart invests more in automation, aiming to have 65% of its stores serviced by automation by the end of fiscal year 2026.
In-Store and Distribution Centers: While Walmart aggressively hired in-store associates during the pandemic, fluctuations in consumer behavior post-pandemic led to staffing adjustments. Some distribution centers saw layoffs due to increased automation.
Factors Driving Layoffs at Walmart
Corporate Restructuring: Walmart has been experiencing a lot of turmoil within the organization, specifically at its corporate level. This includes the movement of employees to centralized stations and integration to improve uniting and effectiveness.
Changes in Remote Work Policies: The abrasive policy of the company’s attempts to transfer low-ranking employees to headquarters has led to layoffs for those incapable or unwilling to relocate; Walmart's strategies guarantee the reinforcement of corporate culture and better teamwork.
Market Dynamics: The nature of the retail industry can be dynamic, sometimes because of changes in customers’ preferences and other times due to changes in the economy, and this has also required staffing changes at Walmart such as in response to the demand for e-commerce.
Comparative Analysis: Walmart vs. Other Major Retailers
Target: In June 2022, Target laid off around 2% of its corporate workforce, affecting several hundred employees.
Amazon: From November 2022 to early 2023, Amazon laid off over 18,000 employees, making it one of the largest tech layoffs in recent history.
Comparison: Walmart’s layoffs, while significant, are more targeted and less extensive compared to Amazon and Target. However, these decisions reflect broader challenges facing the retail sector, including the need to adapt to automation and shifts in consumer behavior.
2022: The retail sector added approximately 495,000 jobs.
2023: Retail employment growth slowed, with only around 100,000 jobs added through May 2023 due to inflation, rising interest rates, and economic uncertainty.
Overall Impact: Despite these fluctuations, the retail sector remains a significant employer, with over 16 million jobs as of May 2023. Walmart’s adjustments mirror broader industry trends as companies navigate an evolving retail environment.
Frequently Asked Questions
Which companies are laying off employees in 2024?
In 2024, several companies across various industries have announced significant layoffs. Notable examples include:
GoPuff: Sacked 6% of its workers, around 300 workers, in May 2024 in an effort to obtain free cash flow positivity by the year-end.
Peloton: Lay off employees which was 15% of its workforce in May 2024 with approximately 400 employees which it justified as a way of adjusting to the revenue expenditure.
Walmart: Proposals to slash hundreds of positions at its headquarters while moving most of its U. S. and Canada-based telecommuting staff to three offices: primarily in Bentonville, Arkansas.
Amdocs: Agency-specific: They suffered from mass layoffs of approximately 3,000 workers during the month of July 2024 with the aim of cutting costs.
Mercury Marine: let go of 1,700 employees on the pretext of temporarily letting them go in July of the year 2024 under mass layoffs.
Warner Bros. Discovery: Expected to reduce less than 1,000 employees in July 2024 due to the current organizational transformations.
Intuit: All these happened when the company dismissed 1,800 employees (approximately 10% of the human resources) in July of 2024 while recruiting an equal number to man new positions in AI.
Macy’s: In January 2024, it planned to dismiss nearly 2,000 workers, which is equal to more than 13% of its corporate workforce.
eBay: Expected to dismiss one thousand workers who are nine percent of its workforce in January next year.
Corning Inc.: Terminated one thousand workers or roughly 2% of the company’s total human resources in January 2024.
Salesforce: Notified the market of approximately 700 people to be laid off in January 2024.
Tata Steel: The proposed process was intended to cut 2,800 positions in January 2024 due to the restructuring process.
How many warehouse workers does Walmart have?
Walmart employs approximately 2.1 million associates worldwide, and it has 1.6 million in the United States. Although the actual figure of warehouse employees is unknown, Walmart acknowledges the importance of these centers, especially where its huge and fast-growing online segment is concerned.
In 2024, Walmart reportedly laid off over 2,300 warehouse workers across various fulfillment centers. These layoffs are part of the company's ongoing efforts to adjust staffing levels in response to changing operational needs and market demands. Walmart's warehouse workforce is a vital component of its supply chain, ensuring that products reach customers efficiently and on time.
Conclusion
Walmart's journey through the turbulent retail landscape since 2020 has highlighted both the resilience and adaptability of the world’s largest retailer. Despite the fact that the company ramped up hiring for a new level of consumer demand through the COVID-19 pandemic, it has also had to minimize its labor force through firing and restructuring when market conditions have changed. The latest in these cuts came in March 2020, when Walmart set off a round of eliminating corporate jobs as part of a restructuring exercise and shifting its focus towards a more automated and e-commerce-based retail model as it sought to stay relevant in a tough global environment.
The effects of Walmart on the number of employees reach beyond the firm’s own workers affecting the entire buying industry as well as areas that surround it. In discussing Walmart’s employment practices as they relate to the use of technology and the direction that the company is moving in, it is crucial to look at new trends in retail employment as they are indicative of the jobs of the future and the central focus on automation of processes. But these changes are not without problems they require displacement of workers and constant training and deployment of workers into new roles.
Compared to internet and big-box competitors such as Target or Amazon, Walmart’s job cuts have been measured but are in line with the industry-wide trend. It became clear that the key dynamics evident in the current and past retail industry will continue to dictate the future employment practices and structure where organizations have to constantly implement technological advancement while addressing their employees’ and community needs. As Walmart continues to do its best to meet the above challenges, the actions it takes will set the trends in the industry and act as a pointer to what is to be expected of the other players in the retail employment business in the coming years.