Walmart Plans Job Reductions at Headquarters, Relocation for Some

Walmart announces job cuts at headquarters along with relocations for certain positions, signaling organizational adjustments that may affect its workforce and operations.

May 13 (Reuters) - Walmart Inc (WMT.N) revealed plans on Tuesday to reduce hundreds of positions at its corporate headquarters and relocate most of its U.S. and Canada-based remote employees to three offices. This decision marks a strategic shift following initial support for virtual work during the pandemic. Donna Morris, Walmart's chief people officer, stated in a memo to U.S. campus associates on Tuesday, "We are requesting that the majority of remote employees and the majority of employees at our offices in Dallas, Atlanta, and our Toronto Global Tech office consider relocation."

The largest retailer globally and the largest private employer in the United States, boasting 2.1 million workers worldwide, aims to relocate most employees to its Bentonville, Arkansas headquarters, with others shifting to offices in the San Francisco Bay Area or Hoboken, New Jersey. The objective is to enhance collaboration, reinforce Walmart's culture, and foster employee career development, as per Morris's memo.

The retail behemoth additionally announced the reduction of "several hundred" positions at its headquarters, citing business changes without providing specifics. The news of the job cuts was first reported by The Wall Street Journal on Monday. During a "business update" call with employees, remote workers were given until July 1 to decide on relocation or accept severance, according to an anonymous source familiar with the matter speaking to Reuters. The source also revealed Walmart's plan to shutter its Dallas, Atlanta, and Toronto offices later this year.

Employees who opt to depart will reportedly receive severance pay equivalent to two weeks' salary for every year served at Walmart, according to the source. Walmart acknowledged engaging in discussions with impacted employees directly and assured its commitment to collaborating with them on their next career moves.

NEW NORMAL?

Similar to many other U.S. companies, Walmart is pivoting its strategy towards increased in-person work following years of remote work driven by the pandemic. Despite initially endorsing remote work as a potential new standard, Walmart has gradually shifted away from this position. In 2023, it closed three tech offices and requested some employees to relocate to central corporate hubs.

Meanwhile, Walmart is in the process of constructing a new headquarters in northwest Arkansas, near its previous location, with plans to open it gradually in 2025. The expansive 350-acre campus is designed to accommodate over 15,000 employees across 12 buildings, according to Walmart's website.

"This likely reflects a broader move toward operational efficiency. Requiring remote workers to return to the office is a way to encourage voluntary departures rather than resorting to layoffs," stated Brian Jacobsen, chief economist at Annex Wealth Management, which includes Walmart in its managed mutual funds and ETFs.

"Offering relocation to a central hub doesn't provide much of a choice. It's essentially a decision between quitting or staying," Jacobsen added.

Walmart is scheduled to release its first-quarter results on Thursday. As of Tuesday afternoon trading, Walmart shares were down 1% at $59.77.

Source: Reuters