Automation to eliminate 700 cash-handling jobs in Sam’s Club stores

Automation of money-counting and some accounting roles in Sam’s Club stores will result in about 700 job cuts. The retailer said employees have opportunities to transfer positions but some of the cash-handling roles being eliminated are among the higher paying jobs out in the clubs, according to Sam’s Club spokeswoman Tara Raddohl.

She said by implementing new technology the entire cash office work will become more efficient, allowing Sam’s Club to deploy more resources to “member-facing roles” who can enhance shopper experiences.

Raddohl said Sam’s Club will work with those who lose a job to find other roles in their home clubs, other locations or at Walmart U.S. Those not staying will be paid for 60 days and severance benefits will follow for those who qualify based on years of service. She said on average about 1 to 2 employees per club are being impacted from the change.

The move is not surprising given Walmart U.S. took a similar action in September 2016 by centralizing store accounting into one center in North Carolina. That move eliminated 7,000 jobs across about 4,500 stores. Raddohl said Sam’s Club began testing the cash automation services after Walmart U.S. adopted the procedure.

Sam’s Club has a much smaller footprint than Walmart U.S. with roughly 650 clubs in the U.S. and Puerto Rico. The average club employs 175 people, according to the retailer’s website. Sam’s Club total employment is roughly 100,000, well below the 1.2 million employed by Walmart U.S.

Sam’s Club CEO John Furner has been on the job since Feb. 1 and has said his mission revolves around people, product and digital capabilities. Furner shook up leadership at Sam’s Club by bringing in Gisel Ruiz as his executive vice president of operations and he elevated the role of Tracy Brown to include operations as well as being chief experience officer.

Furner’s plan is to simplify the business and think about it differently, he said in February. Furner also put more resources into the Sam’s Club e-commerce operation. There are a lot of eyes from analysts on Sam’s Club comp sales and overall profit growth in his inaugural year as CEO.

AUTOMATION MORE COMMON
Automation is taking away more jobs in retail. A recent study by Cornerstone Capital Group estimated as many as 6 million jobs are at risk because of automation, robots and artificial intelligence.

The study said at least 38% of the retail workforce is at risk, which equates to about 16 million U.S. jobs. The shift in retail has already begun with more self-checkout centers that require fewer cashiers. Scan-and-go being used by Sam’s Club and tested by Wal-Mart eliminates the need for a checkout line. Wal-Mart has said labor has been moved from the front of the store and deployed elsewhere, and the same would be true for Sam’s Club.

Peggy Knight, a former manager at Sam’s Club, said times have changed with the advent of technology. In the late 80s and early 90s when she managed Sam’s Club locations, Knight said there were two cashiers at checkout because one rang up the items and the other transferred the merchandise into another cart.

“It was very labor intensive. Self-checkout options are great, but they shouldn’t replace a manned checkout for those shoppers who don’t want to check their own carts. It’s a fine balancing act store and club managers have to do. Automation is great and should be used when it can be, but not at the expense of good customer service,” Knight said.

She applauds Sam’s Club for trying to streamline costs by automating some tasks. The cost of online automation and running an omnichannel retailer is higher than just brick-and-mortar, she said, and members still expect to see low prices that justify their membership fee.

Raddohl said the move to automate some tasks behind the scenes wasn’t taken lightly by club managers and it falls in line with the goals Furner has to drive efficiencies across the business with technology. Raddohl said customer service and people are still important to running a successful Sam’s Club in the future and that isn’t likely to change.