Walmart U.S. centralizing back-office store roles, eliminating 7,000 jobs in 4,500 stores

by Kim Souza (ksouza@talkbusiness.net) 123 views 

Retail giant Walmart U.S. confirmed plans to centralize some invoicing and store accounting roles, roughly one-to-two positions per store over the next few months. Wal-Mart Spokeswoman Deisha Barnett told Talk Business & Politics that the total job elimination is about 7,000, but that does not mean 7,000 employees will be sent to the unemployment line.

“We piloted this program earlier this year in 500 stores as a way to simplify processes and get more associates interfacing with customers which is in line with our mission. We saw some great success with that pilot,” Barnett said. “Most of the associates impacted in the pilot were able to transition to other roles in the store in the areas of pickup and online grocery. We expect the same results as with the trial.”

She also said some of the cash handling operations in the stores will be automated with a new cash recycler system the retailer recently adopted.

“We believe this will help to modernize the accounting office in terms of money handling and this automation allows us to put more associates out in the store helping our customers,” Barnett added.

Lost in the news is confirmation from Barnett that Walmart will centralize some of the accounting and invoicing roles into one location and hire 1,000 employees in that center, which is tentatively set to a location in North Carolina. Barnett said the new back-office accounting center will also make use of technology and be able to handle processes for all of the retailer’s 4,500 stores and more.

Barnett said the roles cut from stores and those in the new centralized office are hourly positions. She said in some cases when employees transfer there is a pay increase, sometimes a pay decrease and occasionally it’s a lateral pay move. Based on experience from the pilot project, Barnett does not see significant headcount changes for the company’s U.S. business which is roughly 1.2 million. She said it will be more about shifting workers around.

“One of things we looked at in the pilot was if the associates could make a smooth transition and they did,” she said.

Ben Bienvenue, retail analyst with Stephens Inc., told Talk Business & Politics the move is congruent with Walmart’s other efforts to streamline store operations while also putting more workers in front of the customer to improve the shopping experience.

“It looks like a surgical alignment and it makes sense for a company the size of Walmart to centralize operations where they can do so,” Bienvenue said.

The move to streamline operations is not new for Walmart. Last year Walmart began using the top shelf restocking model to get employees out of the backroom and on to the sales floor where they can help customers. In produce, Walmart lowered displays of fresh fruits and vegetables to give better sight lines across the department so customers can locate employees. Department managers were added back to the stores two years ago, and according to Wal-Mart Stores CEO Doug McMillon, the move has had one of the greatest impacts on improving store operations on everything from inventory control, better in-stocks and faster turnover of product because these managers run their departments like stores in a store.

Walmart U.S. CEO Greg Foran said part of the company’s mission over the past year and half is to reconfigure store labor, pay workers more, reduce turnover on the front-end, automate as much as possible so there are more employees available on the floor to help customers around the store.

In its recent quarter Walmart U.S. surprised Wall Street with its better-than-expected earnings partially credited to better performing stores. Foran has said doing the little things well over time and simplifying processes will pay off in the long run.

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