Thousands of people gather at Walmart employee Jamboree this week celebrate record revenue, newly opened stores and stocks capturing markets.
One thing that hasn’t expanded at Walmart is the number of employees.
Walmart, the largest private sector employer in the United States, counted 2,165,465 staff worldwide as of the end of last year. That was almost 70,000 fewer than five years ago.
During the same period, retailer Colossus increased revenues of over $150 billion, surpassing the annual revenue of most rivals. Walmart executives are aiming to increase sales of 4% per year, but don’t expect a significant increase in personnel.
Employees are questioning the future of labor in US retail. US retail employs one in 10 American workers and provides a wide range of tools to promote to those who have not completed a university degree. Approximately 1.6 million Walmart employees are in the United States. This is a number that has only happened in the last 10 years.
Wall Street analysts say the expansion of jobs-free companies reflects a tough push to e-commerce and tedious task automation, from unloading shipment pallets to updating shelf price labels. Artificial intelligence is poised to recharge these efforts.
Walmart executives say technology investments mean new roles for workers and not fewer workers.
“The tasks are automated. Jobs are changing, and over the years from now, we are still hiring a lot of people and willing to do so,” CEO Doug MacMillon said at an investor event in April. This week, Walmart hosts 13,000 employees and shareholders at the Associates Week event, an annual ritual at its Northwest Arkansas home.
But critics say workers are missing out. Net sales at Walmart US have increased by 36% over the past five years, while average US wages have increased by 28% to $18.25.
“Walmart’s unemployment growth is a continuation of the harmful trend that Walmart itself helped its pioneers. It has narrowed down more production from an hour of work and increased sales faster than wages.”
Walmart salary trends contrast with their peers. Over the past five years, Big Box retailers Costco, Target and Home Depot have each added tens of thousands of employees. Ecommerce Titan Amazon has nearly doubled its global workforce to 1.6 million.
“In the long run, the trajectory is very clear. Most retailers want to automate many different functions within their business because labor is a very expensive part of doing business.” “We’ve seen Walmart leaning heavily towards that.”
In April, Walmart showed off its labor-saving skills to investors and the media at two new warehouses outside Dallas. One is a food cold storage hub, and the other is a fulfillment center that allows for fast delivery to e-commerce customers.
Approximately 600 associates work in a 730,000 square foot cold storage. The ratio is equivalent to one employee per 1,200 square feet, and is the size of a small home.
Inside, multi-layer geometry from lifts, conveyors and sorters processes pallets of eggs, meat, produce and other fresh produce after they arrive from suppliers and stores them in 80 feet tall racks.
The algorithm-guided robots will later bundle food together and dispatch to coolers at 175 local stores. The center can ship more than twice the amount of traditional cold warehouses, but it can reduce costs by 20%.
Rob Montgomery, Walmart’s vice president of supply chain operations, said the technology saved the associates from strolling the miles and lifting tens of thousands of pounds every day.
Two miles away, Walmart’s DFW-5 fulfillment centre stocks items from the US e-commerce business, which grew 21% year-over-year in the recent quarter. The 1.5mn square foot warehouse can hold up to 2 million individual products, both Walmart itself and third-party vendors using the online marketplace. It employs 650 associates.
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Inside, once 12 steps of work has been condensed into five, which helped to cut the 30% cost expected at the end of the year. “The three-hour process to meet an order occurs within 30 minutes in a building like this,” said Kieran Shanahan, Chief Operating Officer at Walmart US.
Among the automated jobs is the construction of cardboard boxes. Machines uploaded with data on each product’s dimensions will be wrapped tightly in cardboard for shipping.
“In the past, associates used some of their judgments about the size of boxes and small boxes,” Shanahan said. “The algorithm builds that box specifically for orders.”
The local Texas government has approved a multi-million dollar tax cut each by Walmart to build both the fulfillment center and cold storage warehouse that opened in 2023 and 2024, respectively.
In return for the proposed grant, the city of Lancaster and Dallas surrounding counties each requested Walmart to hire hundreds of people at the location.
Although employment commitments are on track, neither facility has received subsidies from the city of Lancaster after failing to meet another threshold for assessment. According to public records, the Cold Storage Warehouse also lost its county grants after failing to meet its $250 million valuation target.
The tax credit requirement did not take into account job losses related to the project. DFW-5 replaced a warehouse named DFW-1 in Fort Worth, Texas, with Walmart cutting more than 1,000 jobs before closing it, offering a $7,500 bonus for the remaining workers to move to the new site. Walmart US’s dedicated e-commerce fulfillment centres have fallen from 40 to 40 in 2020.
Steven Shemesh, retail analyst at RBC Capital Markets, said automation “will only dramatically reduce the number of personnel in some of these supply chain locations.”
Inside stores, cargo coming from already sorted robotic warehouses can be stored directly on shelves rather than having to be hand-tug in the back room. “Upstream automation allowed five full-time associates to work in other areas of the store,” said Paul Lewen, senior vice president at Walmart.
Other moves have kept people down without significantly impacting revenue, according to Bryan Gildenberg, managing director of consulting firm Retail Cities. Walmart sold its Argentine business in 2020 and in 2021 it sold a majority stake in Japanese retailer Seiyu. The two businesses were the most efficient at Walmart, employing 50,000 people. Gildenberg added that strong inflation over the past few years has boosted sales.
In the toughest labor market since the Covid-19 pandemic, Walmart has been trying to keep workers with wage increases and bonuses. Approximately 92% of US associates are paid every hour.
“Walmart sets de facto wages for employment in the service sector in many parts of the country,” said Nelson Liechtenstein, a professor of history at the University of California, Santa Barbara, author and editor of a book on the company.
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Walmart will add frontline workers to implement plans to open 150 US stores and a Sam’s Club warehouse store with only dozens of members. The Walmart supercenter, which recently opened in Cypress, Texas, has brought over 300 jobs, the company said.
However, some employees have left as they are centrally focusing Walmart Conforatis Corporate Functions on their new headquarters campus in Bentonville, Arkansas. Last month, Walmart cut around 1,500 global technology, US operations and US advertising staff. The company’s delivery business relies heavily on drivers, independent contractors.
Walmart executives said they expect the company’s total salary to remain almost constant as the business evolves.
“Many of today’s work didn’t exist just a few years ago, and we expect the pace of change to continue,” Chief Human Resources Officer Donna Morris said in a statement in the Financial Times. “As we become even more technological, their passion and commitment, as our peers of over 2 million, will continue to promote our success and promote our future.”
