Walmart fires corporate employees after cutting forecast

Exterior view of a Walmart store on August 23, 2020 in North Bergen, New Jersey

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Walmart confirmed on Wednesday that it has begun laying off employees at the company about a week after the company lowered its earnings outlook and warned consumers had been holding back on discretionary spending due to inflation.

In a statement to CNBC, the retail giant described the layoffs as a way to “better position the company for a strong future.”

Anne Hatfield, a Walmart spokesperson, declined to say how many workers will be affected and which departments have undergone cuts. She said Walmart is still hiring in areas of its business that are growing, including the supply chain, e-commerce, health and wellness and ad sales.

“Shoppers are changing. Customers are changing,” she said. “We are in the process of restructuring to ensure we are aligned.”

The corporate layoffs were first reported by the Wall Street Journal.

Walmart is the largest employer in the country with nearly 1.6 million employees in the US. The company, which is seen as a gauge of the country’s economy, scared investors last week when it lowered its earnings forecast for the quarter and full year. That warning had a chilling effect on the retail industry, bringing down stocks of companies including Macy’s and Amazon and flaring up the health of American consumers.

Walmart said at the time that as shoppers spent more on necessities like groceries and fuel, they skipped high-margin merchandise like clothing. It said it would have to lower prices to sell more of those items, especially as an abundance of inventory piled up in its stores and those of competitors such as Target and Bed Bath and Beyond.

Later that same week, Best Buy lowered its earnings and sales forecast, saying it saw demand for consumer electronics dwindle — large, discretionary purchases that some buyers may delay.

This story is evolving. Come back for updates.

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