Dive Brief:
- Walmart will cut numerous store management jobs in an effort to contain labor costs but grow wages and invest more in its e-commerce efforts, The Wall Street Journal reported Wednesday.
- Two department manager positions will be eliminated at many of its 4,700 U.S. locations, including those overseeing cellphone departments and online-grocery pickup areas. Instead, contract workers from various cellphone carriers will manage cellphone sales.
- Many workers losing their current position may move into other open jobs within the stores. Since 2016, however, thousands of back-office and corporate jobs have been cut and not replaced.
Dive Insight:
As Walmart intensifies its efforts to keep up with Amazon, the rearrangement of in-store staff seems inevitable.
Walmart began cutting jobs at its company headquarters in early 2017, followed by layoffs in Silicon Valley soon after. Months later, the retailer opened a new fulfillment center in Florida, adding 1,500 new jobs to its payroll.
Walmart's efforts to keep pace with Amazon are resulting in ongoing staffing shifts, as the king of brick and mortar seeks to boost its online viability. In-store new hires are being kept to a minimum, even during the 2017 peak holiday season, when for the second year in a row the company chose merely to offer more hours to existing staff rather than bring on additional help, in contrast to rival Target and others.
Instead, it appears that new staff is directed almost entirely toward fulfillment centers, where speed of picking and shipping dominate. Further, rather than build or purchase new buildings, former Sam's Club stores are being converted into warehouses to support its e-commerce initiative in what may be seen as the ultimate act of reverse logistics.
All of this indicates the determination with which Walmart is pursuing Amazon. At what point its effort will pay off remains uncertain, as the e-commerce giant is alleged to out-value Walmart, Target and Costco combined, despite the fact that Walmart profits remain consistently higher than Amazon's. Presumably, Walmart has a goal in mind — we're waiting to discover it.
