Retail giant Walmart Inc has confirmed that it will eliminate some jobs. However, the affected positions will not impact the company’s retail staff, which makes up the overwhelming majority of its 1.6 million-strong U.S. workforce. Here’s what you need to know about Walmart’s latest round of layoffs.
What’s happened?
On Tuesday, the Wall Street Journal reported that Walmart would lay off or relocate around 1,000 members of its corporate workforce, citing people familiar with the situation.
Walmart has now confirmed to Fast Company that it is eliminating some roles, without specifying the exact number of positions to be cut.
A company spokesperson provided the memo that Suresh Kumar, Walmart’s global CTO and chief development officer, and Daniel Danker, its executive vice president of AI acceleration, product and design, sent to employees on Tuesday, May 12.
In the memo, Kumar and Danker announced that Walmart was simplifying its digital operations by reducing its layers of organizational structure.
“That includes updating some roles to better match the work being done, bringing teams together where it makes sense, and aligning some roles to key locations where related work is already happening,” the memo stated.
Unfortunately, that consolidation of operations means Walmart will also commence with layoffs.
The memo states that “Some work has been consolidated, and some roles have been eliminated,” adding that the company was helping those affected “explore other opportunities within Walmart where possible.”
Fast Company understands that Walmart considers these changes “conversations,” which the company takes to mean that, while around 1,000 roles are affected, it won’t necessarily mean 1,000 workers are laid off.
The company is giving some workers the option to keep their jobs, provided they relocate. The WSJ says the relocation options include the company’s offices in Bentonville, Arkansas, and Northern California.
AI not to blame?
Despite the changes affecting its digital operations, AI isn’t being used as a scapegoat for the layoffs.
Kumar and Danker did not even touch on the topic of artificial intelligence in their memo, and the Wall Street Journal cited a Walmart spokesperson as saying the job cuts are related to operational restructuring rather than AI taking over duties that human workers once performed.
That makes these tech-related job layoffs notable; many companies that have cut tech staff in recent months have cited AI adoption as a direct driver. They include Cloudflare, Upwork, and Coinbase—all of which announced job cuts in just the first part of May, as Fast Company previously reported.
Walmart’s stock price shrugs off the job cuts
Often, when a company cuts jobs, its stock price gets a boost. This is because job cuts are the fastest way to reduce overhead costs and thus boost the bottom line.
However, investors seem to have taken the news of the layoffs in stride. The company’s share price closed up around 2% yesterday, which is within the normal range that most stocks move in any given day.
In premarket trading this morning, the company’s stock price (NYSE: WMT) is currently down less than 1%.
As of yesterday’s close, WMT stock was up 17% year to date, reaching $130.35. Over the past 12 months, WMT stock has risen more than 34%.
Walmart’s most recent job cuts come roughly one year after the company cut 1,500 corporate workers last May.