The Real Reason Walmart Just Laid Off Hundreds Of Employees
Though employers have been increasing benefits and raising wages, only 20% of workers believe they truly have job security (per CNBC). And the 40-year-high inflation has left people in a position where jobs are necessary. "Despite all the talk of wage growth, it hasn't been stellar when you think about inflation. Real wages are declining, and that's true at every income level," ADP Chief Economist Nela Richardson told CNBC in an "Evolve" Livestream.
Even though other job opportunities are available, according to BetterUp Blog, feeling stable at your current job is a big deal. Job security helps reduce stress and anxiety, makes employees feel valued, and improves productivity because workers feel a certain loyalty to their company. It also increases engagement and reduces the turnover rate, making both the company and the employees feel stable. Unfortunately, hundreds of Walmart workers recently lost that job security following an announcement that the company has been laying off employees (via CNBC).
Apparel sales have declined
According to CNCB, Walmart is laying off hundreds of employees. The news comes a week after the company estimated less profit for the year, claiming that inflation has made the average American reduce spending. A spokesperson for Walmart told CNBC that the layoffs will "better position the company for a strong future." Another spokesperson, Anne Hatfield, confirmed that Walmart is still hiring for e-commerce, health and wellness, supply chain, and advertising positions despite the layoff of about 200 jobs.
Per The New York Times and an announcement from Walmart's website, the chain is expected to see a 13% decrease in profits for 2022. Walmart claims that this is likely because fewer customers are purchasing items like clothing due to a tighter budget. "The increasing levels of food and fuel inflation are affecting how customers spend, and, while we've made good progress clearing hard-line categories, apparel in Walmart U.S. is requiring more markdown dollars," Doug McMillon, Chief Executive for Walmart said.
The announcement did say that the company is hopeful this decrease in profits will be combatted by the uptick in back-to-school supplies sales.