Walmart (WMT), the world’s largest retailer, is laying off approximately 200 corporate employees. The retail behemoth’s unusual profit warning and argument that rising inflation has caused the average American to cut back on shopping have contributed to the layoffs.
The layoffs come when consumer confidence is low, and inflation is high. These layoffs are part of a reorganization plan that the company hopes will eventually create new jobs.
In a statement, Walmart stated that it is “evolving certain roles and changing our structure to create clarity and better position the company for a prosperous future.”
According to a Walmart representative, the layoffs will “better position the organization for a strong future.”
What the Walmart Chief Executive Said?
“The increasing levels of food and fuel inflation are affecting how customers spend,” said Doug McMillon, CEO of Walmart. “While we’ve made good progress clearing hard-line categories, Walmart U.S. apparel requires more markdown dollars.”
“We’re updating our structure and evolving select roles to provide clarity and better position the company for a strong future,” a Walmart spokesperson said.
“At the same time, we’re increasing our investments in critical areas such as e-commerce, technology, health and wellness, supply chain, and advertising sales, as well as creating new roles to support our growing number of services for our customers, suppliers, and the business community,” a Walmart spokesperson added.
Walmart Issued a Warning for What?
Walmart also warned that it anticipates slowing consumer spending on non-perishable goods in the year’s second half. Due to the necessity to mark down clothing and other items piled in its stores, the firm issued a warning last week that its profit will decline in the current quarter and fiscal year.
Over 1.6 million people are employed by the retail giant in the U.S., spread across its stores and supply network; these workers were unaffected by the layoffs.
A significant number of employees have recently been let go by numerous renowned American businesses. Even though companies have been raising benefits and compensation, excessive inflation has forced people into a situation where employment is necessary.
Walmart has informed its shareholders that they could anticipate a decline in earnings per share of 8–9 percent during the second quarter and 11–13 percent over the fiscal year 2023.
On August 16, it will reveal the results for the second quarter of the year. Over 2.3 million employees are working at Walmart globally.