Walmart Abruptly Closing 63 Sam’s Club Stores, Firing Thousands On Same Day It Raised Minimum Wages To $11

Wal-Mart was quick to make a media splash with the news that it was raising the starting hourly wages to $11/hour, expanding employee benefits and offering worker bonuses of up to $1000 in response to the Trump tax cuts; it was far more covert, however, with the news that on the very same day it was also closing hundreds of Sam’s Club stores nationwide and laying off thousands of workers according to numerous media reports.

Jessica Buckner, an audit team lead at a Sam’s Club location in Anchorage, told local TV station KTVA that all Alaska stores are closing as part of a larger downsizing across the U.S. “From what I heard, there’s over 260 stores that have been closed down,” she said according to CBS News.

The wholesale clubs’ official closure date is Jan. 26, Buckner said.

Shortly after, the company issued a statement, stating that the number of stores for closure is somewhat lower, at 63, if still a sizable number. That compares with a total of five wholesale club stores the company has closed since fiscal 2013, securities filings show.

Ten to 12 of the closed stores could be converted to e-commerce facilities, the spokesperson said. The news is consistent with Sam’s Club’s ongoing plans to optimize its stores to fulfill more online orders and keep pace with internet retailers such as Boxed.

The closures also affect stores in New Jersey, upstate New York, Georgia, IllinoisIndiana, Ohio, Louisiana, North Carolina, Tennessee and Texas. In some locations, per social media, people showed up to work only to be told that their location was closing, with nearly no advance notice.

The chain, which competes with Costco , has more than 650 locations employing more than 100,000 people, with an average of 175 employees per store, according to the company. 

No formal announcement was posted Thursday morning by Sam’s Club, but the company acknowledged the closures on Twitter with a general statement. 

The company drew criticism from people on Twitter who objected to the lack of notice about the closings. 

And yes, we will repeat it because it bears repeating: the closures come on the same day that Walmart announced it was raising its minimum wage to $11 per hour.

Meanwhile, Gordon Haskett analyst Chuck Grom calculated that Wal-Mart’s wage investment is just 15% of the tax gain. According to Haskett, “Wal-Mart may see tax rate of ~23% in FY19 (year ended Jan. 2019) vs current 32%, which would provide $2b windfall”. As such, he adds, the “labor investment of ~$300m represents just 15% of total; assumes a similar amount will go toward investments in price.”

What will the company use the rest of the money on: why higher dividend payments and accelerated buybacks of course.

Oh, and free advertising: “with WMT being first retailer “out of the gate,” it should get some “free media.

Source: ZeroHedge

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Walmart Announces Plans To Cut More Than 1,000 Corporate Jobs

A day after promising to give its store workers raises and bonuses, Wal-Mart Stores Inc. (WMT) is preparing to hand out pink slips at its headquarters.

The giant retailer, which is based in Bentonville, Ark., and employs more than 1.5 million people in the U.S., plans to cut more than 1,000 corporate jobs, according to people familiar with the matter.

The job cuts are expected to be broad based, focused on workers primarily at the company’s headquarters, the people said. The cuts are expected to be completed by the end of the company’s fiscal year on Jan. 31, they added.

“We’ve been looking at our structure for some time as we explore ways to operate more effectively,” a Wal-Mart spokesman said, without confirming that job cuts are planned this month.

Source: Dow Jones Newswires

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