Walmart has begun to lay off corporate employees, the company confirmed Wednesday, about a week after it slashed its profit outlook and warned that consumers had pulled back on discretionary spending due to inflation.
In a statement to CNBC, the retail giant described 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 divisions have experienced cuts. She said Walmart is still hiring in parts of its business that are growing, including supply chain, e-commerce, health and wellness, and advertising sales.
“Shoppers are changing. Customers are changing,” she said. “We are doing some restructuring to make sure we’re aligned.”
The corporate layoffs were first reported by The Wall Street Journal.
Walmart is the largest employer in the country, with nearly 1.6 million workers in the U.S. The company, seen as a bellwether for the nation’s economy, spooked investors 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.
Walmart said at the time that as shoppers spent more on necessities such as groceries and fuel, they were 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 at those of competitors such as Target and Bed Bath & Beyond.
Later that same week, Best Buy cut its profit and sales forecast, saying it was seeing softening demand for consumer electronics — big-ticket, discretionary purchases that some shoppers can postpone.
As recession worries linger, the U.S. jobs market appears increasingly segmented.
U.S. job openings in June dropped sharply, but the labor backdrop remains tight, with 1.8 open jobs per available worker. Many of the companies that boomed during the pandemic, including Walmart’s major competitor Amazon, have started to scale back on hiring.
Amazon’s headcount shrank by 99,000 people to 1.52 million employees globally at the end of the second quarter. The company’s workforce had almost doubled in size 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 reporters 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, have said they will slow hiring or focus on more productivity with current workers.
It’s unclear whether Walmart has also slowed its pace of hiring at stores and warehouses, which would allow attrition to shrink its workforce. The company will report its quarterly earnings on Aug. 16 and will likely provide an update on overall headcount.
— CNBC’s Annie Palmer contributed to this report.
