WalMart Is Firing 1,000 Corporate Workers

One day after WalMart surprised the nation when on the same day it publicly announced it is raising its starting hourly wage to $11/hour, expanding employee benefits and offering worker bonuses of up to $1000 while at the same time it quietly closed  shuttered 63 Sam's Club stores, the WSJ reports that WalMart is preparing to hand out a thousand pink slips at its headquarters. This in addition to the thousands of part-time jobs that will be affected by the mass Sam's Club closure.

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The giant retailer, which employs more than 1.5 million people in the U.S., plans to cut more than 1,000 corporate jobs, according to the WSJ.

The job cuts are expected to be broad based, focused on workers primarily at the company’s headquarters, the people said. The cuts are expected to be completed by the end of the company’s fiscal year on Jan. 31, they added.

“We’ve been looking at our structure for some time as we explore ways to operate more effectively,” a Wal-Mart spokesman said, without confirming that job cuts are planned this month.

As we reported yesterday, according to Gordon Haskett analyst Chuck Grom, prior to today's layoffs, Wal-Mart's wage investment is just 15% of the tax gain. Grom said that "Wal-Mart may see tax rate of ~23% in FY19 (year ended Jan. 2019) vs current 32%, which would provide $2b windfall". As such the "labor investment of ~$300m represents just 15% of total; assumes a similar amount will go toward investments in price."

Well, make that under $300m after today's layoffs.

Meanwhile, for those wondering what the company will use the rest of the money on: why higher dividend payments and accelerated buybacks of course according to Grom.

Oh, and free advertising: "with WMT being first retailer "out of the gate," it should get some “free media." Although a few more mass layoff announcements, and the free publicity may not be so sterling.

Comments

Kidbuck directaction Jan 13, 2018 12:07 AM Permalink

Since Sam Walton died Walmart has gone to shit. I find half a dozen empty places on shelves every time I shop there. Usually it is a name brand product missing and right next to the empty space is a store brand product. Most of the Walmart brands suck, frozen vegtables, canned cranberry sauce, even their generic OTC drugs are inferior, for example.

They once had the world's best computerized inventory system so there should be no excuse for ever running out of stuff unless it's deliberate or sheer incompetence.

In reply to by directaction

TheObsoleteMan D503 Jan 12, 2018 10:55 PM Permalink

No, being shit at their jobs cost them their paychecks. Not quite two years ago, I bought my daughter a set of four new tires from Sam's Club. Even though I knew their policy, I asked the Tire & Lube manager if anything had changed. He said no, if there ever was a problem with the tires, ANY Sam's Club ANYWHERE in the country would fix or replace them. Less than a year later, two of the tires are almost bald. She had receipts proving she had the tires rotated. The Sam's Club nearest her {not the same store where I originally bought the tires} refused to do anything. The guy at the tire & lube station was going to, it was the store manager who over-rided him, and said we had to go back to the store where they were originally purchased {forty plus miles round trip}. When we arrived at that store, the manager apologized profusely, and even went so far as to say: "We have nothing but problems with that guy, but the regional manager is afraid to replace him. He didn't want those replacement tires coming out of his store budget, as it would mean a smaller bonus for him at the end of the year". Why would they be afraid to fire him? I leave it up to your imagination to figure out why this would be the case. Now I read where that store is closing in a couple of weeks, and that store manager will be out of a job. But not for long. His "type" is very much in demand among corporations right now. It matters not that he is shit at his job, all that matters is that the corporation gets to fill their EEO/Affirmative Action quota for a store manager. The SOB will probably be managing the local Costco the next time I am in there.

In reply to by D503

curbjob Bes Jan 12, 2018 7:18 PM Permalink

All this trickle down winning. I hear Polaroid cameras are back.

 

 

"Meantime, Walmart is also shaking up its management workforce, according to a report by Bloomberg. The report said the retailer is planning to remove about 3,500 store co-managers and adding 1,700 assistant store managers. The latter is a slightly lower-paid role"

https://www.bloomberg.com/news/articles/2018-01-12/wal-mart-said-to-res…

In reply to by Bes

nmewn Bes Jan 12, 2018 7:19 PM Permalink

lol...hell has frozen over, Bes is upset that CORPORATE workers are being terminated.

"...the WSJ reports that WalMart is preparing to hand out a thousand pink slips at its headquarters.

In reply to by Bes

Elmo Blatch Jan 12, 2018 7:27 PM Permalink

I went to the local Wally to buy printer ink today. The word is out. All of the floor help were trying to be busy little beavers. Usually you never see a worker near the floor.

itstippy Jan 12, 2018 7:29 PM Permalink

"The job cuts are expected to be broad based, focused on workers primarily at the company’s headquarters, the people said. The cuts are expected to be completed by the end of the company’s fiscal year on Jan. 31, they added."

This is amazing - January 31 is less than three weeks away!  Wal-Mart has 1000 people in its corporate office that they needed up to now, but three weeks from now they won't need any more?  What the Hell have these corporate guys been doing?

Wal-Mart has a reputation for running a tight and efficient organization.  Were all these guys running the Sam's Club stores that are closing?  

itstippy itstippy Jan 12, 2018 7:51 PM Permalink

Perhaps WMT hired a bunch of experts a year ago to orchestrate the Sam's Club thinning, and now that project is nearing completion.  It takes considerable corporate expertise to shut down hundreds of locations the size of Sam's Club outlets in an orderly fashion.  As you say, spreadsheet wonks and tax specialists.

1,000 corporate heads chopped at one time is pretty remarkable.  

In reply to by itstippy

nmewn itstippy Jan 12, 2018 8:00 PM Permalink

What everyone needs to understand is "the corporate structure"...there is so much fat at the top of every corporation they are the same as the denizens of the Deep State.

I can guarantee you outside of personal relationships with the locals, the locals don't care how many heads are chopped at the corporate level.

All they do (in my experience) is produce unfathomable, unworkable, "solutions" to non-existent problems that by & large slow productivity down just so they (at the corporate level) are doing "something".   

In reply to by itstippy

itstippy nmewn Jan 12, 2018 8:11 PM Permalink

A friend of mine has worked at the local Wal-Mart for many years.  She's seen store managers come and go, some good and some bad.  She says that Corporate policy moves store managers around every few years so they don't get too "comfortable" in the local community and stay focussed on serving Wal-Mart Corporation, not the local Little Leauge.

I have no insight into the culture at Wal-Mart Corporate and how ruthless it is or is not, but axing headcount by 1,000 in one chop is going to rattle some careers for sure.

In reply to by nmewn

NoPension Jan 12, 2018 7:30 PM Permalink

No mercy when they moved in and wiped out multi generation mom and pops.

Now Bezos is sucking all the air out of the room.

In due time...he gets his. I might be dead.

besnook Jan 12, 2018 7:30 PM Permalink

gee, what if the retailers find out that if they pay more they sell more and even have some price elasticity, will they raise wages even more? and will that encourage or force other low wage employers to do the same?

MuffDiver69 Jan 12, 2018 7:30 PM Permalink

It’s a bloated company. The Sam’s Club near me has been dead for a decade. The company will end up stronger and is paying more in salary to people that need little skill. Perhaps these writers could explain how they would justify paying more then what they reported. This is a bizarre arguement the dimwits who wrote this are making. Basically every company saw its earnings rise and if they are viable, they are stronger...Just come out and say you are going to criticize this President and say he should have raised taxes- that would be more honest...schmucks

mendigo Jan 12, 2018 7:45 PM Permalink

Well maybe its about numbers.

Cut so many stores there should be prop reduction in overhead i imagine.

Big companies are managed by the numbers. They dont remember why t&ey went into business.

fbazzrea Jan 12, 2018 7:47 PM Permalink

i suspect WMT has finally recognized their original flyover-country demographic has been downgraded to dollar stores and their new demographic are a growing non-metro would-be WholeFoods customer willing/able to pay for what they want.

don't remember the author but several years ago i read that when America becomes more third-world, WMT will find its old customers no longer able to afford to shop there. reminds me of southeast Asia where street food vendors and open markets are the fare of everyday people while bigbox stores, walk-in restaurants and Western-styled "modern" grocers are mostly frequented by tourists and upper middleclass.

who'da ever thunk WalMart to be "high class?"