Because Walmart’s staff cuts are a wake-up call for the US economy
Walmart is cutting jobs after the US retail giant issued its second profit warning in 10 weeks last week. The company, one of the largest employers in the US, warned that consumers are cutting spending due to inflation
Walmart is cutting jobs as part of a corporate restructuring.
After the anticipations of the Wall Street Journal, yesterday the US retail giant confirmed that it is initiating layoffs and corporate restructuring.
A week ago, the Arkansansas retail giant also warned of falling profits.
About 200 jobs would be at risk, according to the Journal . The US commercial giant has begun informing employees at its Bentonville (Ark) headquarters and other companies about the restructuring process, which involves various offices including merchandising, global technology and real estate teams. However, a Walmart spokesperson declined to say how many workers will be affected and which divisions have suffered cuts.
In a statement to CNBC , Walmart described the layoffs as a way to "better position the company for a strong future."
The move by Walmart, one of the country's largest employers, represents "another sign of a slowdown in the US labor market and economy," comments The Washington Post.
All the details.
THE STAFF CUTS ANNOUNCED BY WALMART
Walmart is firing about 200 corporate employees, according to press reports.
In a statement, the largest US retailer confirmed it is "updating our facility and developing select roles to provide clarity and better position the company for a strong future."
Walmart pointed out that it is still investing and adding jobs in key areas such as e-commerce, advertising, and the supply chain.
PROFIT WARNING
The job cuts come after Walmart cut its profit outlook for the second quarter and the rest of the year last week, warning that high food and fuel costs impacted customer spending.
DECREASE IN PURCHASES
Walmart had to cut down on the clothing and other merchandise that piled up in its stores. The company then warned that it expects a slowdown in customer spending on general merchandise for the second half of the year.
WHY WALMART'S MOVES SCARE INVESTORS
Walmart is the largest private employer in the United States, and while most of its workers are hourly staff, it has thousands of jobs. As of January 31, Walmart had 2.3 million employees worldwide, including 1.7 million in the United States.
“The company, seen as a benchmark for the nation's economy, frightened investors on July 25 when it cut its outlook for quarterly and full-year earnings indications. That profit warning had "a chilling effect on the retail sector, dragging the shares of companies including Macy's and Amazon down," CNBC said .
RECRUITMENT ALSO SLOWS DOWN
Walmart's announcement comes as the US job market is cooling.
Companies are reducing the pace of new hires.
Amazon's headcount shrank from 99,000 to 1.52 million employees globally at the end of the second quarter. The company's workforce nearly doubled during the Covid health crisis as it rushed to keep up with customer demand for groceries, puzzles and more online.
Other companies, including Shopify and Robinhood, have also recently announced layoffs. Many big techs have changed their hiring schedules in recent weeks. The latest was Google. In mid-July, number one Sundar Pichai informed staff of a slowdown in hiring. Before that, Meta . On June 29 Mark Zuckerberg, owner and CEO of Meta (Facebook) announced to employees the decision to reduce the target of hiring engineers by 30%. On the occasion, Zuckerberg warned them to prepare for a deep economic recession.
It is unclear whether Walmart has also slowed the pace of hiring in stores and warehouses. The company will announce its results for the quarter on August 16 and will likely provide an update on the overall headcount.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/perche-i-tagli-al-personale-di-walmart-sono-un-campanello-dallarme-per-leconomia-usa/ on Thu, 04 Aug 2022 12:27:50 +0000.