By Siddharth Cavale
(Reuters) -Walmart Inc announced on Tuesday that it plans to cut hundreds of jobs at its corporate headquarters and relocate a majority of its U.S. and Canada-based remote workforce to three offices, a shift in strategy after initially endorsing virtual work during the pandemic.
"We are asking the majority of associates working remotely, and the majority of associates within our offices in Dallas, Atlanta, and our Toronto Global Tech office, to relocate," Donna Morris, Walmart (NYSE:WMT)'s chief people officer wrote in a memo to its U.S. campus associates on Tuesday.
The world's largest retailer and the country's largest private employer, with 2.1 million workers globally, said most of the relocations will be to its headquarters in Bentonville, Arkansas, while some will move to its offices in the San Francisco Bay Area or Hoboken, New Jersey.
The goal of the move was to bring more people together more often but also to strengthen Walmart's culture and develop the careers of its employees, Morris said in the memo.
The retail giant also said it was reducing "several hundred" roles in its headquarters due to changes in some parts of its business, without elaborating further.
The Wall Street Journal first reported news of the job cuts late on Monday.
On a "business update" call with employees on Monday, remote workers were given until July 1 to make a decision about relocating or to quit with severance, according to a source familiar with the matter, who spoke on condition of anonymity with Reuters. The source added that Walmart would be closing its Dallas, Atlanta and Toronto offices later this year.
Those who choose to leave will receive two weeks' pay for every year they worked at Walmart as severance, the source said.
Walmart said it had discussions with employees who were directly affected and that it would work with them on the next steps forward.
NEW NORMAL?
Like other U.S. companies, Walmart is shifting its strategy towards more in-person work after years of pandemic-induced remote working. At one point it even endorsed remote work as the new norm.
"We believe the future in tech will be one in which working virtually will be the new normal, at least for most of the work we lead," Suresh Kumar, the head of Walmart's global tech operations wrote in a LinkedIn post in 2021.
However, it has slowly transitioned away from stance. In 2023, it closed three tech offices and asked some staff to relocate to central corporate hubs.
In the meantime, Walmart is constructing a new headquarters in northwest Arkansas, just a few miles from its previous location, which it plans to open in phases in 2025.
The expansive 350-acre campus is designed to accommodate over 15,000 employees across 12 buildings, according to Walmart's website.
"This is likely just part of a broader push towards operational efficiency. The mandate that remote workers report into the office is the closet way to get people to quit instead of doing a layoff," said Brian Jacobsen, chief economist at Annex Wealth Management, which holds Walmart in mutual funds and ETFs it manages.
"Giving people a choice to relocate to a hub isn't much of a choice. It's more of a choice of whether to quit or not," Jacobsen added.
The retailer is set to report first-quarter results on Thursday. Walmart shares were down 1% at $59.77 in afternoon trading on Tuesday.