Wal-Mart to Cut 7,000 Back-Office Store Jobs
September 01 2016 - 12:30PM
Dow Jones News
Wal-Mart Stores Inc. plans to cut thousands of back office
positions around the country, a sign that the retailer's effort to
make its cavernous stores more efficient is also changing the face
of its workforce.
The country's largest private employer is eliminating about
7,000 U.S. store accounting and invoicing positions over the next
several months, jobs mostly held by long-term employees, often some
of the highest paid hourly workers in stores. The retailer wants
those employees working with shoppers, not in backrooms, say
company executives. Centralizing or automating much of those tasks
is more efficient, they say.
The jobs are coveted as a rare desk job in retail. "You are not
running around the store on your feet all day," and receive decent
pay, says a Wal-Mart store accounting employee who earns about $13
an hour, or $27,000 a year. "Everybody wants to get in there. The
jobs never open up," says this person, who has worked at the store
for nine years.
The back office cuts to Wal-Mart's 4,600 U.S. stores is a sign
that retail workers—one of the largest employee cohorts in
America—face big changes as their employers spend heavily to
compete with Amazon.com Inc. and grab foot traffic from other
chains.
The positions Wal-Mart is eliminating manage an individual
store's daily cash flow or processes claims from manufacturers
delivering goods directly to stores, among other tasks. Starting
early next year, much of that work will be handled by a central
office or new money-counting "cash recycler" machines in stores.
Wal-Mart tested the change in about 500 stores earlier this
year.
The company believes most displaced employees will find
customer-facing roles, says Deisha Barnett, a Wal-Mart spokeswoman.
"We've seen many make smooth transitions during the pilot," she
said. Their current wage level isn't guaranteed, she said.
Store workers at Wal-Mart and other retailers are being asked to
work differently in many way as retailers adjust to industry
changes. For example, Wal-Mart is rapidly expanding a service that
lets shoppers order groceries online and pick up curbside. That
requires employees to pick produce off shelves, pack orders and
deliver them to a customer's car, jobs that didn't exist at
Wal-Mart three years ago. Wal-Mart has changed how it stocks
shelves to bring more employees to the sales floor during the day,
not the middle of the night, to interact with customers.
Wal-Mart is spending billions to boost e-commerce sales and make
stores more efficient and pleasant places to shop, reducing
inventory and raising wages. Last year the retailer lifted its
store employee starting wage to $9, or about $18,700 a year, for a
full-time employee. Starting earlier this year new hires can move
to $10 an hour after completing a six month training program. In
August Wal-Mart said it planned to purchase discount online
retailer Jet.com Inc. for $3.3 billion.
While Wal-Mart's online sales have been sluggish, sales in
existing stores have risen for eight straight quarters, outshining
many competitors struggling to compete for recession-weary
customers or online shopping converts. Other retailers, including
Target Corp. and Costco Wholesale Corp., are also raising starting
wages.
In the wake of those investments in their workforces and online
efforts, retailers are making other cuts. "Anytime one expense line
goes up, you are likely to see a reduction in a corresponding
expense line," says Joel Bines, co-head of consulting firm
AlixPartners LLP's retail practice. In today's environment "any
dollar not being spent on delivering a better experience to the
customer or delivering the customer online is a wasted dollar," he
says.
A typical Wal-Mart Supercenter employs hundreds of people from
cashiers and cart wranglers to store managers who oversee around
$100 million in annual sales in a busy location. In the many small
towns and rural areas with a Wal-Mart, the store can be one of the
largest employers.
"Right now I'm getting my resume together," said one Wal-Mart
employee who works in invoicing earning about $15 an hour. After
almost 21 years with the company the employee isn't interested in
moving back out to the store floor, she says.
Write to Sarah Nassauer at sarah.nassauer@wsj.com
(END) Dow Jones Newswires
September 01, 2016 12:15 ET (16:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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