Walmart lays off company employees after slashing forecast

Exterior view of a Walmart store on August 23, 2020 in North Bergen, New Jersey

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walmart began laying off company employees, the company confirmed on Wednesday, about a week after reduces its profit outlook and warned that consumers had cut discretionary spending due to inflation.

In a statement to CNBC, the retail giant described the layoffs as a way to “better position the company for a strong future.”

Anne Hatfield, a spokeswoman for Walmart, declined to say how many workers will be affected and which divisions have suffered cuts. She said Walmart was still hiring in growing parts of its business, including supply chain, e-commerce, health and wellness, and ad sales.

“Buyers change. Customers change,” she said. “We are restructuring to make sure we are aligned.”

The corporate layoffs were first reported by The Wall Street Journal.

Walmart is the nation’s largest employer, with nearly 1.6 million workers in the United States. The company, seen as a bellwether for the national economy, spooked investors on July 25 when it cut its outlook for quarterly and annual earnings forecasts. The warning had a chilling effect on the retail sector, dragging down shares of companies such as Macy’s and Amazon and send a flare on the health of the American consumer.

Walmart said at the time that as shoppers spent more on necessities like groceries and fuel, they were jumping on higher-margin merchandise, including clothing. He said he would have to cut prices to sell more of these items, especially like a glut of stocks piled up in its stores and those of competitors such as Target and Bed bath and beyond.

Later that same week, best buy reduce its profit and sales forecasts, saying he was seeing a slowdown in demand for consumer electronics — expensive discretionary purchases that some buyers may postpone.

As recessionary concerns persist, the The American job market appears to be increasingly segmented.

U.S. job postings in June fell sharply, but the social context remains tense, with 1.8 open jobs per available worker. Many companies that have boomed during the pandemic, including Walmart’s biggest competitor, Amazon, have started cutting hiring.

from Amazon the workforce has decreased from 99,000 people to 1.52 million employees worldwide at the end of the second quarter. The company’s workforce had nearly doubled in size during the Covid health crisis as it rushed to meet customer demand for groceries, puzzles and more online.

The reduction was primarily due to attrition, Amazon Chief Financial Officer Brian Olsavsky said in a call with reporters after the company’s second-quarter earnings report last week.

Other companies, including Shopify and Robin Hood, also recently announced layoffs. And others, like Facebook parent Meta and parent Google Alphabetsaid they would slow down hiring or focus on greater productivity with current workers.

It’s unclear whether Walmart has also slowed its pace of hiring in stores and warehouses, allowing attrition to reduce its workforce. The company will release its quarterly results on August 16 and will likely provide an update on the overall workforce.

—CNBC Annie Palmier contributed to this report.

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