WMT Walmart Inc

Pandemic puts 10% of workforce on leave, prompts retailer to require masks on staff

By Sarah Nassauer 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (April 20, 2020).

A picture hangs in the office of Walmart Inc. Chief Executive Doug McMillon showing company trucks rolling into New Orleans after Hurricane Katrina, an indication of the retailer's pride in quickly restocking stores during the toughest of times.

Walmart is being tested like never before by a coronavirus pandemic that has shut down much of the nation, put 10% of its workforce on leave and led to at least 18 deaths at the company. Managing the health of workers and shoppers, reassuring local officials, and keeping stores and warehouses staffed have become a massive effort inside Walmart at a time when customers are relying more than ever on the nation's largest retailer.

"We are one of the few places in the country where a sizable amount of people are gathering," said Dan Bartlett, a former Bush White House official who is now a senior Walmart executive. The company has been in communication with "just about every mayor and governor you can think of."

The challenges are magnified at Walmart, the country's largest employer with 1.5 million U.S. workers and more than $500 billion in global sales. Walmart executives have debated various issues, such as whether to give masks and gloves to workers, when to close and clean stores, how to control shoppers who get too close to workers and each other, and even whether to disable the theft-detection systems connected to self-checkout machines, according to people familiar with the discussions.

Starting next week, Walmart plans to require all workers to wear masks, a spokesman told The Wall Street Journal, in line with a new wave of local laws and in anticipation of new standards as businesses open up as the virus wanes.

Worker absences have risen because of illness, fear of coronavirus and as Walmart added more aggressive health checks and generous leave policies, according to interviews with executives and store workers. Around 150,000 people are on leave, said a person familiar with the situation, and fewer than 2,000 workers have tested positive for Covid-19.

"The health of our associates tends to track the health of the country as a whole," the company said. "We are following the evolving guidance of public health experts, and we have quickly taken steps aimed at keeping our customers and associates safe."

People are turning to the retailer more than ever, for necessities or a job. Sales at Walmart's 4,700 U.S. stores surged nearly 20% in March, according to documents reviewed by the Journal. More than one million people applied to work at the company in the past month. It hired 150,000 of them, and plans to hire another 50,000.

Walmart started ramping up hiring in mid-March as sales for food and cleaning supplies surged. A 12-person team built a system to onboard new workers within 24 hours, instead of the usual two weeks, said Drew Holler, a senior vice president. The goal: Hire 5,000 people a day.

Many new hires have come from the hospitality and food-service industries, Mr. Holler said.

Don Monagan, a 26-year-old who lives in Niagara Falls, N.Y., was running the kitchen in a family-owned restaurant when the state forced all nonessential businesses to shut. Now working in a Walmart deli, he makes $16 an hour, more than he earned in his former salaried position.

"Most of us are just glad that it's busy, and we have somewhere to work, " Mr. Monagan said.

At first, Walmart executives discussed closing some U.S. stores so they could keep shelves stocked and have enough people to run them. Instead they chose to close stores overnight for cleaning and stocking. The executives decided to hire additional workers and give cash bonuses to existing staff. The company hasn't raised its minimum starting wage, $11 an hour.

James Sexton, the mayor of Evergreen Park, Ill., temporarily revoked his local Walmart's liquor license earlier this month after two workers died of Covid-19. The store manager wouldn't share much about the status of sick workers in late March, Mr. Sexton said, so he was surprised when Walmart said in April that two had died.

After Mr. Sexton pulled Walmart's liquor license "my phone rang and it was an attorney," who set up a Saturday morning call with two Walmart executives, the mayor said. He reinstated the license after the Walmart executives assured him the store had been sanitized twice, the deceased workers hadn't been in the building for more than a week, and they apologized for not telling the city.

"We have lost some associates, and that is obviously painful," Mr. McMillon said April 9 in a memo to all staff. "The numbers we've seen so far don't indicate a disproportionate impact, but we must stay vigilant, " he said, adding that Walmart has temporarily closed an e-commerce warehouse and a few stores.

Walmart's history of keeping stores stocked amid natural disasters is helping, but "nobody had the answers on the front side of this," said Rollin Ford, a former Walmart executive responsible for logistics involved in the company's Katrina response and other disaster recovery efforts. "We did for a hurricane. We did for some kind of geographic issue, but we didn't have something prescribed for a national issue like this."

Walmart has the benefit of recent pandemic experience in China, where it has more than 400 stores, 16 of them in Wuhan, the Chinese coronavirus epicenter. Throughout a two-month lockdown, the company briefly closed only two, as the government cleared the way for deliveries and Walmart worked to locate new local sources of food.

But unlike China, where the national government has total control, in the U.S., Walmart must navigate state and county regulations. Vermont, Michigan and other local governments have told retailers not to sell items deemed nonessential, including craft supplies, toys and furniture. Some restrictions have caused confusion and pushback from shoppers. In Vermont, Walmart can't sell clothes. In Pennsylvania, it can.

Walmart is making adjustments to safety policies amid mounting illness, local government requests and changing CDC guidelines. They include adding plexiglass barriers to pharmacy areas and checkout lines. It started limiting how many people can enter its stores to 20% of their capacity. It has temporarily closed stores for deeper cleaning in some virus hot spots, like New Orleans.

At the start of each shift, workers are asked health questions and have temperatures checked. Those with fevers or symptoms are sent home with sick pay and cannot return for seven days or until they are fever free for at least three. A Walmart worker in western Pennsylvania said three of roughly 30 staffers were sent home because of suspected illness during a recent shift.

"We will continue to be proactive in our approach to keeping our associates safe," Walmart said.

Corporate employees in Bentonville, Ark., and elsewhere, started working from home after March 13. Mr. McMillon and other top executives are frequently visiting stores and warehouses, posting pictures on Instagram. In recent days, Mr. McMillon wears a mask in his photos. The company has opened nine of the drive-through Covid-19 testing sites that Mr. McMillon discussed in a White House press conference a month ago. Twenty are planned by the end of April, a spokeswoman said.

Walmart has adjusted the flow of products to warehouses and stores to meet the surge in demand for food and household goods, prioritizing space on delivery trucks for those items. The system is still strained enough that Walmart is asking shoppers to buy less.

"In the last five days, we have sold enough toilet paper for every American to have their own roll," Mr. McMillon said earlier this month on the "Today" show. If people could "buy week-to-week rather than stocking up," he said, "it would be helpful to everybody."

Write to Sarah Nassauer at sarah.nassauer@wsj.com

(END) Dow Jones Newswires

April 20, 2020 02:47 ET (06:47 GMT)

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