As Walmart outsources finance and accounting work to New York-based professional services firm Genpact, the retail giant is laying off 569 employees at a corporate office in Charlotte, North Carolina, beginning in September according to a Worker Adjustment and Retraining Notification in that state.
A Walmart spokesperson confirmed the move to Retail Dive in an interview and said the Genpact partnership was announced last fall. "This was a difficult decision that affects friends and associates we care about deeply. We appreciate their important contributions, and we're committed to handling every transition over the next seven months smoothly and respectfully," she said. "We are maintaining a corporate presence in Charlotte. As our company continues evolving, we've said we must strike the right balance between managing the needs of our business, our associates and our customers."
Walmart's Charlotte office will remain open for its "People Solutions" team, which provides some human resources services like background checks and drug testing for prospective employees and to support a Walmart U.S. regional office, according to the spokesperson.
The workers will be leaving the Charlotte office starting in September and continuing into March 2020, according to Walmart's letter to the state, emailed to Retail Dive. Those staying on until then will receive a retention bonus, with the amount determined by position, according to the Walmart spokesperson. They will be eligible to find work at Walmart and Sam's Club stores in the area, although the spokesperson didn't say if those would be store associate positions or accounting positions. The retailer is also providing outplacement services, she said.
Walmart has always run a tight ship for a massive company (the largest employer in the U.S., by some measures). But as the retailer has steadily shifted its focus to e-commerce, buying up e-marketplace Jet and several smaller e-retailers, it has upended many of its traditional brick-and-mortar operations, possibly inviting inefficiencies in the process. In 2015, as a percentage of net sales, the retailer's operating expenses were 19.4% of net sales; by fiscal 2018 that had swelled to 21.5%, according to its end-of-year filing with the Securities and Exchange Commission. That figure edged down to 21% in fiscal 2019, according to the filing.
"Walmart is a strong company undergoing a period of great transformation," Derek Scott, Walmart's senior associate general counsel wrote in a letter to the North Carolina Department of Commerce, Charlotte Mayor's office and Mecklenburg County manager's office. "Our customers are changing the way they shop, which requires us to change how we work. To compete in this new era of retail we must be willing to pull back in some areas to invest in others. Today, regrettably, these changes led to the elimination of positions at the above-listed facility."
Correction: This story has been updated to clarify when the lay offs will occur. Walmart will lay off a total of nearly 600 workers beginning in September.