- Walmart is the largest private employer in the United States, employing close to 1.6 million people.
- The company reduced its outlook for quarterly and full-year profit guidance on July 25.
- Walmart will announce its quarterly earnings on August 16.
Walmart acknowledged on Wednesday that it has started laying off corporate staff. This news comes around a week after the company lowered its forecast for profits and warned that shoppers have cut back on discretionary spending as a result of inflation.
The retail behemoth gave the explanation that they were carrying out the layoffs in order to “better position the firm for a prosperous future.”
Anne Hatfield, a representative for Walmart, declined to comment when asked how many employees will be impacted or which departments have been affected by the layoffs. She stated that Walmart is still hiring for positions in areas of its business that are expanding, such as its supply chain, e-commerce, health and wellness, and advertising sales departments.
“Consumers are becoming more diverse. The customer base is evolving,” she explained. “In order to ensure that we are on the same page, we have begun the process of restructuring.”
Walmart is the largest private employer in the United States, employing close to 1.6 million people across the country. When the corporation reduced its outlook for quarterly and full-year profit guidance on July 25, it worried investors because the company is considered to be a barometer for the economy of the nation.
This warning had a chilling effect on the retail sector, pulling down the stocks of businesses such as Macy’s and Amazon and sending up a flare about the health of the American consumer in the process.
Walmart reported at the time that customers were avoiding high-margin products such as clothes because they were spending more money on necessities such as groceries and fuel.
It stated that it would need to lower prices in order to sell more of those things, particularly given the surplus of inventory that had piled up in its stores as well as those of competitors such as Target and Bed Bath & Beyond.
Later on, during the same week, Best Buy reduced its profit and sales prediction, stating that it was experiencing weaker demand for consumer electronics, which are large, discretionary purchases that some customers can choose to delay making.
Concerns about another economic downturn have contributed to a fragmentation of the job market in the United States.
Even though the number of job opportunities in the United States fell significantly in June, the labor market is still quite competitive with 1.8 available jobs for every worker.
Many of the businesses that experienced rapid growth during the pandemic, including Amazon, one of Walmart’s most significant competitors, have begun to cut back on employment.
At the end of the second quarter, Amazon had a total of 1.52 million employees worldwide, 99,000 less than at the beginning of the quarter.
During the height of the Covid health problem, the company had nearly increased the size of its workers in an effort to meet up with the rising demand of online customers for groceries, puzzles, and other goods.
According to comments made by Amazon Chief Financial Officer Brian Olsavsky during a call with reporters following the release of the company’s earnings report for the second quarter last week, the reduction was mostly the result of attrition.
A number of other businesses, such as Shopify and Robinhood, have also later stated that they will be doing layoffs.
And still others, such as the parent company of Facebook, Meta, and the parent company of Google, Alphabet, have stated that they will either slow hiring or focus on increasing productivity with the staff they now have.
It is not apparent whether Walmart has also slowed down its rate of hiring employees at its stores and warehouses, which would allow attrition to reduce the size of its workforce.
On August 16, the company will announce its quarterly earnings and is likely going to provide an update on the overall headcount at that time as well.
[embedpost slug=”walmarts-profit-problems-impact-retail-stocks-and-heighten-consumer-spending-worries/”]
