Wal-Mart slashes 7,000 back office jobs

Dive Brief:

  • Wal-Mart Stores Inc. is eliminating about 7,000 accounting and invoicing positions—coveted jobs primarily held by long-term employees who rank among the retail giant’s highest-paid hourly workers, the Wall Street Journal reports.
  • Wal-Mart is shaking up its store workforce in an effort to shift employees from the back office into roles that emphasize direct interaction with shoppers. The company began testing the new approach in June in 500 U.S. stores, most on the West Coast, cutting as many as 1,500 positions dedicated to accounting and invoicing tasks and shifting employees to customer-facing positions like online pickup associates and pharmacy technicians.
  • In the absence of human staffers assigned to tasks like daily cash flow management or processing claims, Wal-Mart will hand off those responsibilities to a central office or automated systems like money-counting “cash recycler” machines installed in stores. A Wal-Mart spokeswoman told the Journal that most displaced employees will find customer-facing roles, citing many smooth transitions during the June pilot, but said their current wage level isn’t guaranteed.

Dive Insight:

As the nation’s largest corporate employer with 1.5 million employees across the U.S., Wal-Mart's workforce is in a period of significant cultural change. Faced with messy stores and empty shelves in many areas of the country, Wal-Mart has taken a series of steps to drive efficiencies, improve logistics and boost customer service. These efforts are fueled part by increased personnel investments: Last year, the retailer raised starting wages for full-time store employees to $9, or about $18,700 a year, and new hires can climb to $10 an hour after completing a six-month training program.

Wal-Mart has also made strides to compete more effectively in e-commerce. Alongside expanded omnichannel efforts like same-day delivery pilots, Wal-Mart last month acquired online retailer Jet for $3.3 billion, the highest price ever paid for an e-commerce startup.

Those initiatives appear to be paying off. Last month, Wal-Mart reported second quarter earnings of $3.77 billion, up from $3.48 billion a year earlier. Q2 same-store sales jumped 1.6%—the largest same-store sales growth in four years—thanks to increased traffic in stores and online.

“We believe a contributing factor to the results is our consistent improvement in customer experience,” Wal-Mart CFO Brett Biggs said on a conference call following the earnings report. “Customer surveys indicate that we’re making good progress in providing a better shopping experience with cleaner stores, faster checkout and friendlier service… While there is still a lot of work to do in executing our multi-year plan, we’re encouraged by the results we’re seeing.”

The latest round of Wal-Mart job cuts serves notice that the retailer’s cultural transformation is far from complete. As its ship-to-store and in-store pickup options continue to gain traction with consumers, Wal-Mart store associates become more critical than ever to guarantee that shelves are stocked and purchases are ready for consumers upon arrival. At the same time, innovations in hardware and software continue to make humans increasingly unnecessary to complete traditional back office tasks like counting receipts and invoicing suppliers.

It’s anyone’s guess what the Wal-Mart of the future will look like, but it’s certain that its stores—and its workforce—won’t look anything like they do today.

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Filed Under: Corporate News
Top image credit: Flickr, Mike Mozart