By Geoffrey Smith
Investing.com -- Walmart (NYSE:WMT) stock was underperforming the broader market in premarket trading, roughly unchanged from Monday's close amid reports that its recently announced job cuts will run to more than 2,000 at its online shopping warehouses.
According to Bloomberg, over half of the positions affected will be at the company's operations in Fort Worth, Texas, while 400 will go at a fulfillment center in Pennsylvania. Other fulfillment centers in Florida and New Jersey will cut 400 and 200 jobs, respectively. It didn't mention cuts at Chino in California, which had also reportedly been earmarked for downsizing.
The cuts, which were outlined by the company last month in broad terms but not quantified, are the latest sign of companies stepping up their attempts to strip out costs after a surge in operating expenses over the last two years. Walmart's job cuts are largely the result of automation at its fulfillment centers, and the company has said that employees being laid off will be offered jobs elsewhere in its network.
The longer-term trend toward digital shopping is still intact, however, with non-store retail sales growing 9.2% from a year earlier in the first two months of the year, compared to growth of only 6.8% for overall retail sales.
At Walmart specifically, online sales continue to rise at twice the rate of its overall sales, as the group slowly transitions to an omnichannel structure capable of fending off the challenge from Amazon (NASDAQ:AMZN).
The slowdown in consumer spending over recent months, which some have seen as the herald of a recession, has led to a steep increase in layoffs at retailers. According to Challenger, Gray & Christmas, retailers laid off 17,456 employees in the first three months of 2023, compared with 761 in the same period in 2022.