America’s bellwether retailer Walmart (NYSE: WMT) is downsizing its workforce, following a less-than-ideal profit outlook as surging inflation weathers away at consumers’ pocketbooks.
According to the Wall Street Journal which cited a person familiar with the matter, Walmart started to lay off employees in corporate roles one week after warning of weakening margins. About 200 positions are up for elimination, as the retailer embarks on a restructuring affecting its merchandising, global technology, and real estate departments. The company said it now expects its profit levels to decline not only during the current quarter but also the fiscal year, as consumers skip big-ticket purchases and instead opt to spend their income on necessities such as groceries and fuel.
“Shoppers are changing. Customers are changing,” said Walmart spokesperson Anne Hatfield. “We are doing some restructuring to make sure we’re aligned.” The retailer is America’s largest employer, with a count of around 1.6 million workers. During its chilling July 25 profit guidance, Walmart said it is forced to reduce prices for its high-margin merchandise in order to liquidate some of its piled-up inventory.
Walmart’s latest corporate layoffs come during growing uncertainty over the US economy, as a number of other major retailers report deteriorating sales and profits. As recession fears become more pronounced, the US labour market appears to show signs of weakening. Latest figures show that job openings fell sharply in June, as companies pull back on hiring after experiencing a boom during the height of the Covid-19 pandemic.
Information for this briefing was found via the WSJ and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.