Walmart Sheds Jobs as Automation Harbingers the Future
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At first it was just 200. Now Walmart Inc. is laying off more than 2,000 warehouse employees across five U.S. states, with more projected.
Worker Adjustment and Retraining Notification (WARN) Act notices have been filed in the impacted states, which include an estimated 1,000-plus positions in Fort Worth, Tex., 600 in Pennsylvania, 400 in Florida and 200 in New Jersey. The exact number isn’t immediately clear since affected workers have 90 days to find replacement jobs at the discounter’s other operations.
“Customer expectations are changing, and we are moving quickly to meet and exceed their needs. As demand grows, we are maximizing our network of stores and fulfillment centers, to deliver items for online customers, when and how they want them,” a Walmart spokeswoman said in a statement.
She noted that the discounter “recently adjusted staffing levels at our [fulfillment center] in select markets to better prepare for the future needs of customers. This decision was not made lightly, and we’re working closely with affected associates to help them understand what career options may be available at other Walmart locations.”
Walmart is the largest private-sector employer in the U.S., and the layoffs come at a time when the nation’s economic growth appears to be slowing.
Payroll firm ADP Inc. said Wednesday that private sector employment rose by 145,000 jobs in March, but that’s a 40 percent drop from the 242,000 jobs added in February.
“Our March payroll data is one of several signals that the economy is slowing,” Nela Richardson, ADP’s chief economist, said. “Employers are pulling back from a year of strong hiring and pay growth, after a three-month plateau, is inching down.”
Some believe that the use of new innovations, especially at the back of the store, could result in fewer warehouse workers going forward.
Michael Appel, former CEO and chairman of Rue21 who is managing director at Getzler Henrich & Assoc., believes that as more retailers invest in tech, such as AI to improve their businesses, they’ll have to also to figure out what the proper staffing should be within their overall operations, not just at the warehouse or fulfillment centers.
The latest layoffs at Walmart, however, need to be viewed in context. The discounter in 2021 added 20,000 supply chain workers, and it also has been investing in high-tech automation systems. It now means fewer retail store associates, with staffing requirements shifting to different jobs behind the scenes. Tech investments in supply chain processes also enabled Walmart to cut its seasonal staff hires. For Holiday 2022, Walmart offered current workers the ability to work extra hours before adding temporary workers to its payroll, a move that also helped its bottom line.
The discounter said Wednesday that it has been reengineering its supply chain to fulfill customer needs, with a “more intelligent and connected omnichannel network that is enabled by greater use of data, more intelligent software and automation. The outcome improves in-stock, inventory accuracy and flow whether customers shop in stores, pickup, or have a delivery.”
Automation, such as robotics, help it increase item storage, giving the distribution center a more predictable and improved delivery service to stores and customers. Stores now operate as places to shop, fulfillment centers and delivery stations, Walmart said. The discounter expects that by the end of Fiscal Year 2026, “roughly 65 percent of stores will be serviced by automation, approximately 55 percent of the fulfillment center volume will move through automated facilities, and unit cost averages could improve by approximately 20 percent.”
Walmart acknowledged that the changes will impact some existing jobs. But it’s also not saying that more retail jobs will be lost with the use of automation. Rather, the company said that over time, automation will increase the throughput per person, “while maintaining or even increasing [the number of employees] as new roles are created.”
A redeployment of jobs to other components of a retailer’s operations was noted at Walmart’s Investor Day presentation on Tuesday. Walmart U.S. president and CEO John Furner touched upon the evolution of Walmart’s supply chain processes during his presentation.
He emphasized that supply chain networks that were once aimed at just completing certain tasks have now been reengineered so that all networks are now connected. That includes combining digital catalogs into a single App so customers can search for everything the discounter sells, as well as using data and technology to match customer intent in order to optimize internal networks for speed, cost and predictability. Furner also noted that customers want speed, and having 4,700 stores close to the customer shortens the last mile, while lowering delivery times and costs. Investments in automation help to combine orders.
“Automation augments parts of the work to improve the experience customers have. It improves accuracy, speed, and it helps us know what we own and where it is so we can
successfully deliver perfect orders. And it improves our [employees’] productivity and eases some of the most physical work,” Furner said.
On the jobs front, Furner said automation will result in “new roles emerging that are less manual, better designed to serve customers, and which pay more.”
