Walmart is cutting hundreds of back-office work in approximately 500 stores across the United States. In the company's bid to increase efficiency, thousands of people will lose their jobs.
The majority of the job cuts are expected to occur in the West and will include employees who work in invoicing and accounting, said Walmart spokesman Kory Lundberg. The company's bookkeeping activities will be done in its headquarters in Bentonville, Arkansas. "Cash recycler" machines will replace the manual cash counting at the stores.
According to Mark Ibbotson, Walmart U.S.'s central operations executive vice president, the counting machine's current system is error-prone.
"We really want to pull our workforce onto the floor," said Ibbotson.
In Walmart's attempt to cut expenses, the company said that they want their employees to focus on customer service instead of the back-office work. The invoicing and accounting workers who are slated to lose their jobs will be offered opportunities in customer service.
However, this suggested they may not get the same wage. Lundberg added that these workers will earn an hourly rate of approximately $17.55 in the new customer service posts.
The cost-cutting plan had been tested at 50 Walmart stores earlier this year, with only 1 percent of the idled workers leaving the company, added Lundberg. The latest news is merely an expansion of the pilot program.
The company's sales at U.S. stores in operation for over a year increased by 1 percent in the quarter that ended on April 30. This marked the 7th consecutive quarter the company showed slight growth increase.
Walmart's executives shifted their efforts in simplifying the stores' operations during their discussions with investors. The executives noted that the company's 4,600-store operation is already too complex.
Is Walmart In Trouble?
In January, Walmart announced the closure of 269 stores globally. These include the 154 locations in the United States alone. The closures were expected to affect around 16,000 employees across the globe. About 10,000 workers in the United States faced losing their jobs. However, the retailer attempted to relocate affected employees to nearby Walmart locations that are still in operation.
The company also said in January that as they shift toward Neighborhood Markets and Supercenters in lucrative locations, they are opening about 405 stores globally in the upcoming fiscal year.
"Net net, we like these developments and see them as part of increasing focus on quality (versus quantity) of Wal-Mart operations," said analyst David Schick from Stifel Nicolaus earlier this year.