A spokesperson for the company told Reuters that hundreds of employees at five U.S. Walmart facilities that process e-commerce orders are being given 90 days to find new jobs.
The reduction or elimination of evening and weekend shifts resulted in the layoff of about 200 employees in Pedricktown, New Jersey, as well as hundreds more in Fort Worth, Texas; Chino, California; Davenport, Florida; and Bethlehem, Pennsylvania, according to the spokesperson.
Due to its size, Walmart is a retail bellwether, so the layoffs there may be a sign of more trouble to come for the American economy, which many economists believe will enter recession this year.
Walmart said in a statement that it had “recently adjusted staffing levels to better prepare for future needs of customers” and that it would closely work with affected employees to find jobs at other locations.
The spokesperson stated that affected employees would be paid for 90 days to look for work at alternative facilities, such as those in Lancaster, Texas, and Joliet, Illinois, where the business has recently opened up new high-tech e-commerce distribution centres.
Over the past few years, Walmart has made significant investments in automation, working with firms like Knapp to reduce the number of steps required for employees to process online orders from 12 to 5, as seen at its Pedricktown, New Jersey location.
Walmart CEO Doug McMillon expressed his excitement about the automation opportunity on a post-earnings call in February. Walmart has plans to increase investments in automation technology as part of its more than $15 billion capital expenditure budget this year.
Employees at Walmart’s 5,000 U.S. stores, which the company increasingly uses as a platform to deliver orders to customers’ doorsteps, will be eligible for positions after being laid off from the five fulfilment centres, according to the spokesperson. With about 1.7 million American employees, Walmart is the largest private employer in the country.
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According to a Reuters analysis of labour department data, Walmart did not post a Worker Adjustment and Retraining Notification (WARN) notice for the layoffs other than in Pedricktown, New Jersey. U.S. labour law requires employers with 100 or more employees to give 60 days’ notice in advance of plant closures and mass layoffs through the use of a WARN notice.
The spokesperson refrained from using the term “mass layoff” and claimed that business as usual continued in the warehouses. The company did not send out a WARN notification for the other locations because it does not know how many workers will ultimately be let go and rehired, the spokesperson added.
The announcement comes months after the business laid off nearly 1,500 workers at an online order fulfilment centre in Atlanta, Georgia, as part of a modernization plan to construct warehouses with a higher emphasis on technology. The new round of layoffs, according to the spokesperson, are unrelated to the company’s modernization plans. The company increased the minimum wage by $2 to $14 per hour in January. Target and Amazon, which pay employees a starting wage of at least $15 per hour, were still ahead of this.