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Walmart Cutting Hundreds of Back-Office Jobs on West Coast

Back-office positions are no longer a priority for big-box retailer Walmart.

The Bentonville, Arkansas-based company on Wednesday said it would do away with accounting and invoicing jobs and other behind-the-scenes tasks at 500 U.S. stores, mostly on the West Coast. Roughly 1,500 people are expected to be affected by the decision, or about two to three per store.

The news followed the announcement in January that Walmart would close 269 underperforming stores in the U.S. and Latin America, cutting around 16,000 jobs.

A company spokesperson said the latest move is part of an effort to improve customer service and cut costs by getting people out of the backroom and onto the selling floor. To that end, the affected workers—most of whom are currently paid a higher hourly wage than other employees—will be offered customer-facing positions, such as working in the online pickup department or as pharmacy technicians.

However, anyone who does decide to shift into one of those roles will also take a pay cut and their new hourly wage will be $17.55, but the company is confident it can retain most of the workers. Mark Ibbotson, executive vice president for central operations at Walmart U.S., told the Wall Street Journal that less than 1 percent of the affected employees are expected to leave the company.

Invoicing will be handled at the Bentonville headquarters.

Last February, Walmart raised the average full-time hourly wage from $13 to $13.38, while part-time workers received a bump from $10 an hour to $10.58. In addition, associates at or above their pay band maximum received a one-time lump sum payment equal to 2 percent of their annual pay. The company didn’t share how many of its workforce—then totaling 1.4 million—were employed on a full- or part-time basis, but said that last year more than 150,000 employees were promoted to full-time positions.

In the first quarter of the current fiscal, Walmart posted a 0.9% increase in revenue, from $114.8 billion to $115.9 billion, and a 1.5% pickup in traffic. While profit declined 7.8% from $3.3 million to $3.1 million, or $0.98 per diluted share, analysts had forecast $0.88 per share.

Ibbotson said the recently announced employee changes are part of a pilot program. “If we are happy, if everything follows, we will consider the next phase,” he said.