Walmart lays off hundreds of employees, requires remote workers to relocate

Walmart on Tuesday (May 14) announced layoffs affecting several hundred jobs at the retail giant's campus offices. It also said that it will require most remote workers and personnel in its Dallas, Atlanta and Toronto offices to relocate to its primary offices in Bentonville, Arkansas, Hoboken, New Jersey, and the San Francisco Bay Area.

The news, conveyed via a Walmart staff memo provided to the news agency, said the relocations will serve the goal of bringing more of us together more often. The memo likewise noted that being together in person makes us better and helps us to collaborate, innovate and move even faster.

No specific reason mentioned for layoffs 

The memo did not give a reason for the layoffs beyond stating that some parts of our business have made changes that will result in job losses. A Walmart spokesperson did not immediately reply to questions regarding the reason for the layoffs and why Walmart is working to consolidate other office jobs in Arkansas, New Jersey and California. 

Cutting hundreds of jobs 

Walmart Inc (WMT.N), opens new tab announced that it plans to cut hundreds of jobs at its corporate headquarters and relocate a majority of its US and Canada-based remote workforce to three offices, a shift in strategy after initially endorsing virtual work during the pandemic.

"We are asking the majority of associates working remotely, and the majority of associates within our offices in Dallas, Atlanta, and our Toronto Global Tech office, to relocate," Donna Morris, Walmart's chief people officer wrote in a memo to its US campus associates on Tuesday.

The world's largest retailer and the country's largest private employer, with 2.1 million workers globally, said most of the relocations will be to its headquarters in Bentonville, Arkansas, while some will move to its offices in the San Francisco Bay Area or Hoboken, New Jersey. The goal of the move was to bring more people together more often but also to strengthen Walmart's culture and develop the careers of its employees, Morris said in the memo.

The retail giant also said it was reducing several hundred roles in its headquarters due to changes in some parts of its business, without elaborating further. The Wall Street Journal first reported, opens new tab news of the job cuts late on Monday.

On a business update call with employees on Monday (May 13), remote workers were given until July 1 to make a decision about relocating or to quit with severance, according to a source familiar with the matter, who spoke on condition of anonymity with Reuters. The source added that Walmart would be closing its Dallas, Atlanta and Toronto offices later this year.

Those who choose to leave will receive two weeks' pay for every year they worked at Walmart as severance, the source said. Walmart said it had discussions with employees who were directly affected and that it would work with them on the next steps forward.

Working virtually to be new normal

Like other US companies, Walmart is shifting its strategy towards more in-person work after years of pandemic-induced remote working. At one point it even endorsed remote work as the new norm.

"We believe the future in tech will be one in which working virtually will be the new normal, at least for most of the work we lead," Suresh Kumar, the head of Walmart's global tech operations wrote in a LinkedIn post in 2021.

However, it has slowly transitioned away from stance. In 2023, it closed three tech offices and asked some staff to relocate to central corporate hubs. In the meantime, Walmart is constructing a new headquarters in northwest Arkansas, just a few miles from its previous location, which it plans to open in phases in 2025. The expansive 350-acre campus is designed to accommodate over 15,000 employees across 12 buildings, according to Walmart's website.

Push towards operational efficiency

"This is likely just part of a broader push towards operational efficiency. The mandate that remote workers report into the office is the closet way to get people to quit instead of doing a layoff," said Brian Jacobsen, chief economist at Annex Wealth Management, which holds Walmart in mutual funds and ETFs it manages.

"Giving people a choice to relocate to a hub isn't much of a choice. It's more of a choice of whether to quit or not," Jacobsen added.

The retailer is set to report first-quarter results on Thursday. Walmart shares were down 1 per cent at $59.77 in afternoon trading on Tuesday.

(With agencies inputs)