New York (AFP) - Walmart announced Thursday it will raise the minimum wage for US workers to $11 an hour and pay bonuses, but announced plans to close 63 Sam's Club stores in the US.
Owned by Walmart, Sam's Club is a chain of membership-only warehouse stores that offer discounted prices. Up to 12 of the shuttered Sam's Club stores would be converted into warehouses for e-commerce, the company said in a news release.
The wage increase starting in February elevates base starting pay from the current $9 an hour, and Walmart also said it would pay employees a one-time bonus of up to $1,000, expand parental and maternity leave programs and provide financial assistance to employees adopting children.
The new employee benefits will affect more than one million employees at Walmart US, Sam's Club, in e-commerce and other departments, Walmart said.
Walmart executives said they were able to boost employee benefits following the tax reform, which cut US corporate taxes from 35 to 21 percent.
The lowest starting pay for Walmart workers previously was $9 an hour, increasing to $10 after 90 days following completion of a training program. But a company spokesman told AFP the starting wage for all workers now will be at least $11.
American Airlines, AT&T and Wells Fargo have been among the companies that have given bonuses or awarded pay increases in recent weeks.
Skeptics have said these initiatives represent a pittance compared with the profit gains expected from lower tax rates, some of which is expected to go to higher executive pay, shareholder payouts and share buybacks.
Walmart announced the pay raise early Thursday and touted the announcement on its Twitter feed with a group of smiling employees giving a thumbs up.
Walmart's pay hike was also highlighted on Twitter by Ivanka Trump and touted by Treasury Secretary Steven Mnuchin during a White House briefing.
But the news was soon overshadowed by reports around the country about Sam's. In some cases, employees learned of the closures only Thursday when they showed up for work and found the store shut, according to local news reports in Texas and some other states.
The chain will close three stores in the Indianapolis, Indiana area on January 26, affecting a total of 419 workers, the Indianapolis Star reported.
Other states set to see closures included Arizona, Illinois and Tennessee, according to local news reports.
Sam's employees affected by the closures will receive the bonus announced by Walmart Thursday, 60 days of pay and potentially additional severance.
"We need great people to help lead us into the future and we hope that many of them will stay with the company at either a local store or club," said Sam's Club president John Furner.
"Change is never easy, but we're making these decisions as part of running a healthy business."