Apr 6, 2023 - Business

Walmart leans into automation amid layoffs, inflation concerns

Photo by Joe Raedle/Getty Images

Walmart announced long-term plans to grow its retail business by enlisting machines to tackle more work while resolving to maintain or increase its workforce, company leaders said during an investment meeting Wednesday.

What's happening: Walmart expects 65% of its stores to be serviced by automation by 2026, and for over half of its goods to be processed through machine-operated facilities — its "next generation" fulfillment centers announced last June.

  • The automation is related to supply chain and market fulfillment, spokesperson Jacquelyn Cook told Axios.

The intrigue: Walmart says more automation will lead to fewer jobs requiring physical labor and replacing those roles with higher-paying positions, according to a news release.

  • Yes, but: On Monday, the company announced about 2,000 layoffs at warehouses.
  • Cook told Axios the layoffs were unrelated to the automation expansion announced two days later.

Zoom out: The largest retailer in the world has openly worried about high inflation, with its CFO saying Wednesday the company is "still feeling the effects of higher prices," according to Reuters.

By the numbers: "Achieving our targeted 4% sales growth over the next five years would add more than $130 billion of sales on top of our roughly $600 billion base today," John David Rainey, Walmart executive vice president and chief financial officer, said in a news release.

  • "On top of that, we think the opportunity for operating-income growth over the next 3-5 years could be better than what we've outlined."

What they're saying: Sam's Club has seen an increase in Gen Z and millennial membership that is overwhelmingly likely to use digital services such as scan and go, Kathryn McLay, president and CEO of Sam's Club, said Wednesday. That technology allows customers to scan items as they shop and pay on their phone without stopping at a register.

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