Theft Problem
“Retail giant Walmart has had a rough 2022 due to theft and low sales adjusted for inflation. Walmart CEO and President Doug McMillon told CNBC in an interview earlier this month that theft “is higher than what it has historically been” and there will be consequences “if that is not corrected over time.”
But what are the consequences?
As an ex Walmart employee I have seen firsthand how the company responds to financial difficulties. Typically Walmart is reluctant to layoff retail employees as they make up a significant percentage of the overall company and they are essential to continuing day to day operations. However they are much more willing to layoff behind-the-scenes workers at the home office or supporting facilities. In fact they have already laid off around 1,500 workers at a fulfillment center in Georgia. Walmart’s retail employees are handled somewhat differently.
Silent layoffs
Walmart typically does not layoff retail employees as they makeup a large percentage of the organization and firing them would lead to thousands of unemployment claims that the company would not win. So the retailer resorts to hour cuts. Some employees can see anywhere from 10-50% reductions in scheduled hours. This is done to cut operational costs and drive out employees that are not able to handle the hour reductions. Employees that leave the company voluntarily in search of a livable paycheck are typically not eligible for unemployment benefits.
Store Closures
Store closures are likely on the horizon for 2023 as increases in theft could make some stores unprofitable. Walmart previously underwent a mass store closing in 2016 that resulted in 269 stores closing down worldwide.
Impact
Walmart currently employs 2.3 million employees and is the world’s 3rd largest employer. On average each super center has between 250-500 employees. Hundreds will lose their job with each store closure and many more will lose wages to do hour-cuts. Overall inflation will continue to take its toll on the American people well into 2023.