Walmart applies off corporate employees following scoring forecasts

August 5, 2022: -On Wednesday, Walmart started to lay off corporate employees, the company confirmed, a week after it slashed its profit outlook. It is a warning that consumers had pulled around on discretionary spending because of the inflation.

The retail giant conveyed the layoffs as a way to “better position the company for a strong future.”

Anne Hatfield, a Walmart spokesperson, declined to say how many workers will be affected and what companies have experienced cuts. She said that Walmart is still employing in its growing business, including supply chain, e-commerce, health and wellness, and advertising sales.

Walmart is a massive employer in the country, with almost 1.6 million workers in the U.S. The company, seen as a bellwether for the nation’s economy, spooked investors on July 25 when it cut its outlook for quarterly and full-year profit guidance. That warning had a chilling effect on the retail sector, dragging down the stocks of companies including Macy’s and Amazon and sending up a flare about the health of the American consumer.

At the time, Walmart said that consumers spent more on necessities such as groceries and fuel, skipping over high-margin merchandise, including apparel. It said it would have to cut prices to sell more of those items, especially as a glut of inventory piled up in its stores and competitors like Target and Bed Bath & Beyond.

U.S. job openings in June dropped sharply, but the labor backdrop remains tight, with 1.8 open jobs per available worker. Many companies that boomed during the pandemic, including Walmart’s major competitor Amazon, have commenced to scale back on hiring.

Amazon’s headcount shrank by 99,000 to 1.52 million employees globally at the end of the second quarter. The company’s workforce had almost doubled during the Covid health crisis as it rushed to keep up with customer demand for groceries, puzzles, and more online.

That reduction was primarily due to attrition, Amazon Chief Financial Officer Brian Olsavsky said on a call with journalists after the company’s second-quarter earnings report last week.

Other companies, including Shopify and Robinhood, have also recently announced layoffs. And still, others, such as Facebook parent Meta and Google parent Alphabet, control said they would slow recruiting or focus on more productivity with current workers.

It’s ambiguous whether Walmart has also delayed its pace of hiring at stores and repositories, which would allow attrition to shrink its workforce. The company will report its quarterly earnings on August 16 and likely provide an update on the overall headcount.