Walmart is hoping to have about 65 percent of its stores automated within the next three years, it has announced – just days after revealing it would be laying off 2,000 employees who fulfill online orders.
The news came at the U.S. retail giant’s annual investor meeting in Tampa as the business – with a net worth of $388 billion – invests heavily in automation to speed up orders at its e-commerce fulfillment facilities.
It wasn’t immediately clear if the move would lead to more layoffs at the country’s biggest private employer, which has about 1.7 million U.S. workers and another 60,000 abroad.
The company did however say that the moves would reduce the need for lower-paid roles. Walmart is hoping to have about 65 percent of its stores automated within the next three years.
‘As the changes are implemented across the business, one of the outcomes is roles that require less physical labor but have a higher rate of pay,’ the Bentonville, Arkansas-based retailer said in a filing. ‘Over time, the company anticipates increased throughput per person, due to the automation while maintaining or even increasing its number of associates as new roles are created,’ it added.
‘This increased efficiency will not only support better inventory management, but it will also support Walmart’s rapidly growing e-commerce business,’ Stephens Inc analyst Ben Bienvenu wrote in a note.
Walmart is yet to respond to questions about whether the moves will result in any near-term layoffs.
The world’s largest retailer by sales maintained its forecast for the fiscal year ending Jan 31, 2024, which calls for net sales to rise by 2.5 percent to 3 percent and earnings by $5.90 to $6.05 per share. It also kept its forecast for first-quarter sales to rise between 4.5 percent and 5 percent in constant currency.
About 55 percent of packages that it processes through its fulfillment centers will be moved through automated facilities by January 2026, improving unit cost averages by about 20 percent
Walmart has invested billions of dollars in technology for its online order facilities, including buying grocery robotics company Alert Innovation and partnering with companies such as Knapp to help cut the number of steps it takes for employees to process e-commerce orders down to five from 12.
On a post-earnings call in February, Walmart CEO Doug McMillon said he was ‘most excited about the automation opportunity we have’ with plans to increase investments in automation technology as part of its more than $15-billion capital spending budget this year.
According to a February report from the Bureau of Labor Statistics, there are roughly 9.9 million job openings and 5.9 million unemployed in the U.S.
Walmart hiked their minimum wages earlier this year across the country surpassing $17.50 which were expected to be reflected in March 2 paychecks.