Walmart is planning to cut as many as 7,000 back-office positions across 4,600 U.S. stores within the next few months, according to a report from the Wall Street Journal. These positions are mostly held by long-term personnel working in store accounting and invoicing. The change spotlights the retailer’s interest in ensuring employees are located where it matters most: in front of the customer.
In June, Walmart revealed that it was eliminating as many as 1,500 back-office accounting or invoicing positions across 500 stores on the West Coast, but the retailer added that it would offer employees working in those positions the opportunity to switch to a customer-facing position within the store.
However, the sheer number of positions being eliminated makes it less likely that such switches will be easy or even practical. In another indication of the retailer’s priorities, Walmart already has invested $2.7 billion in a minimum wage increase, scheduling improvements, and employee training in an effort to get more employees on the sales floor and to operate a faster store environment.
With chief competitor Amazon experimenting with a 30-hour work week with a few of its employees within its human resources department as a means to test their productivity and workplace happiness, it will be interesting to see how the employees at both companies handle their respective situations. If Amazon’s experiment succeeds and spreads beyond the initial test phase, Walmart would likely have to rethink how it can balance offering the optimal customer experience while providing the right perks for its store employees.
From an employment perspective, Walmart’s back-office gigs were actually in high demand since they didn’t take place on the sales floor, where store associates are always on their feet. Employees working the eliminated positions often manage an individual store’s daily cash flow or process claims from manufacturers delivering goods directly to stores. In 2017, much of that work will be handled by a central office or new money-counting “cash recycler” machines in stores, in a move designed to automate processes while holding down costs.
In eliminating the positions, Walmart also is clearly showing that it is tipping its focus toward e-Commerce as it battles Amazon. While Walmart had its highest comparable store sales gain in four years in Q2, the retail giant’s 11.8% e-Commerce growth gave the brand much bigger news to cheer about. As Walmart continues to invest in e-Commerce, especially on the heels of its $3.3 billion acquisition of Jet.com, the retailer is likely to continue seeking ways to shift budgets away from store operations wherever and whenever possible.