Walmart says 65% of its stores will be served by ‘automation’ in next three years
Walmart says 65% of its stores will be served by ‘automation’ over next three years – as it lays off 2,000 warehouse workers
- The US retail giant – with a net worth of $388 billion – made the announcement at its annual investor meeting in Tampa
- It was not immediately clear whether the move would lead to more layoffs at the country’s largest private employer
Walmart hopes to automate about 65 percent of its stores within the next three years, it has announced — just days after the unveiling, it would lay off 2,000 employees who fulfill online orders.
The news came during the U.S. retail giant’s annual investor meeting in Tampa, as the company — with a net worth of $388 billion — is investing heavily in automation to accelerate orders at its e-commerce fulfillment facilities.
It wasn’t immediately clear whether the move would lead to more layoffs at the country’s largest private employer, which employs about 1.7 million Americans and another 60,000 abroad.
However, the company said the moves would reduce the need for lower paying positions.
Walmart hopes to have automated about 65 percent of its stores within the next three years
“As the changes are implemented company-wide, one of the outcomes is positions that require less physical labor but have higher wages,” the Bentonville, Arkansas-based retailer said in a filing.
“Over time, the company expects higher throughput per person as a result of automation, while maintaining or even increasing headcount as new roles are created,” it added.
About 55 percent of the packages it processes through its fulfillment centers will move through automated facilities by January 2026, improving average unit costs by about 20 percent, the company said.
“This increased efficiency not only supports better inventory management, but also supports Walmart’s rapidly growing e-commerce business,” Stephens Inc analyst Ben Bienvenu wrote in a note.
Walmart has yet to respond to questions about whether the moves will lead to layoffs in the short term.
The world’s largest retailer by revenue maintained its forecast for the fiscal year ending January 31, 2024, calling for a 2.5 percent to 3 percent increase in net sales and earnings of $5.90 to $6 .05 per share.
It also maintained its forecast for first-quarter revenue growth of between 4.5 percent and 5 percent in constant currency.
About 55 percent of the packages it processes through its fulfillment centers will move through automated facilities by January 2026, improving average unit costs by about 20 percent
The company’s net worth to date is $388 billion. There are about 1.7 million American workers and another 60,000 abroad
Walmart has invested billions of dollars in technology for its online ordering facilities, including buying supermarket robotics company Alert Innovation and partnering with companies like Knapp to reduce the number of steps employees need to process e-commerce orders to five from twelve.
During a post-earnings call in February, Walmart CEO Doug McMillon said he was “very excited about the automation opportunity we have” with plans to increase investment in automation technology as part of the more than $15 billion investment budget. this year.
According to a February report from the Bureau of Labor Statistics, there are about 9.9 million job openings and 5.9 million unemployed in the US.
Walmart raised their national minimum wage to more than $17.50 earlier this year, which was expected to be reflected in its March 2 paychecks.