WalMart To Fire 16,000 As It Closes 269 Stores Globally
The last 12 months have not been kind to WalMart.
When the world's largest retailer bowed to pressure to raise wages for its lowest-paid employees, the living wage crowd cheered. In short order, it became apparent that the reverberations from the $1.5 billion endeavor would spell trouble for the company.
When a series of ill-fated efforts to squeeze the supply chain failed to plug the gap, the company resorted to store closures (or "plumbing" as WalMart calls it), job cuts in Bentonville, and reduced hours.
Finally, in October, WalMart threw in the towel and cut guidance. Its shares plunged.
Now, we learn the retailer is set to close nearly 300 stores, affecting some 16,000 employees worldwide.
- WAL-MART TO CLOSE 269 STORES
- WAL-MART SAYS 10,000 ASSOCIATES AFFECTED IN U.S.
- WAL-MART SEES ABOUT 16,000 ASSOCIATES AFFECTED
- WAL-MART SEES FINAL EFFECT 20C-22C ON EPS CONT OPS
- WAL-MART EXITS WAL-MART EXPRESS PILOT
This time around, "plumbing" was not cited as a factor.
Behold: the effect of an across the board minimum wage hike...
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Full PR
Wal-Mart Stores, Inc. (WMT: NYSE) today announced plans to close 269 stores in the U.S. and globally.
In October 2015, the company said an active review of the portfolio was underway to ensure assets were aligned with strategy. Today’s action follows a thorough review of Walmart’s nearly 11,600 worldwide stores that took into account a number of factors, including financial performance as well as strategic alignment with long-term plans. In total, the impacted stores represent less than 1 percent of both global square footage and revenue.
“Actively managing our portfolio of assets is essential to maintaining a healthy business,” said Doug McMillon, president and CEO, Wal-Mart Stores, Inc. “Closing stores is never an easy decision, but it is necessary to keep the company strong and positioned for the future. It’s important to remember that we’ll open well more than 300 stores around the world next year. So we are committed to growing, but we are being disciplined about it.”
Store Closings/Openings
As part of today’s action, the company will close 154 locations in the U.S., including the company’s 102 smallest format stores, Walmart Express, which had been in pilot since 2011. Walmart instead will focus on strengthening Supercenters, optimizing Neighborhood Markets, growing the e-commerce business and expanding Pickup services for customers. Also covered in the closures are 23 Neighborhood Markets, 12 Supercenters, seven stores in Puerto Rico, six discount centers, and four Sam’s Clubs.
Internationally, the company is following a disciplined strategy of actively managing its portfolio. Consistent with this strategy, the company is closing 115 stores outside the United States. This includes 60 recently-closed, loss-making stores in Brazil, which represents only 5 percent of sales in that market. The company has already been able to relocate many affected associates in Brazil to other stores. The remaining 55 stores are primarily small, loss-making stores in other Latin American markets. Walmart will disclose more detail about those actions, including the number of stores per market, after completing local associate and community outreach.
Walmart will continue to invest in its future, with plans to open stores worldwide in the coming fiscal year. Domestically, Walmart intends to open 50 to 60 Supercenters and 85 to 95 Neighborhood Markets in Fiscal 2017, which begins Feb. 1. In the same period, Sam’s Club plans to open in seven to 10 new locations. Internationally, Walmart intends to open between 200 and 240 stores during the coming year.
Financial Impact
The financial impact of these closures is estimated to be approximately $0.20 to $0.22 of diluted earnings per share from continuing operations, with approximately $0.19 to $0.20 expected to impact the fourth quarter of fiscal 2016. The remainder of the impact will fall into the first half of fiscal 2017. Approximately 75 percent of the impact relates to U.S. closings and the remaining portion involves Walmart International, with a large majority of the international impact relating to the closures in Brazil. Walmart will report its fiscal 2016 fourth-quarter and full-year results on Feb. 18. The estimated financial impact is not included in the company’s fiscal 2016 fourth quarter and full year earnings guidance.
Store Associates and Transition Assistance
In total, approximately 16,000 associates will be impacted by the decision, about 10,000 of them in the U.S. More than 95 percent of the closed stores in the U.S. are within 10 miles on average of another Walmart, and the hope is that these associates will be placed in nearby locations. Where that isn’t possible, the company will provide 60 days of pay and, if eligible, severance, as well as resume and interview skills training. Whether with Walmart or elsewhere, the company’s objective is to help all associates find their next job opportunity.
“The decision to close stores is difficult and we care about the associates who will be impacted,” McMillon said. “We invested considerable time assessing our stores and clubs and don’t take this lightly. We are supporting those impacted with extra pay and support, and we will take all appropriate steps to ensure they are treated well.”
Walmart will continue to serve the shopping needs of U.S. customers in the markets affected by today’s announcement through other Walmart locations and online at www.walmart.com. Customers can find the nearest Walmart store through the store locator function on the company’s website. A list of U.S. stores that are closing will be available today on the company’s website at approximately 11 a.m. CST.
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They allocated 20 billion for buybacks late last year and by the looks of it most of it was spent last week it was the only green Dow component for several days
Per an article I found they claim to have spent 1 billion raising wages vs. 20 billion for stock buy back.
But this is all about raising the wages for the peons, not an overall drop in retail spending.
Agreed, in general and in principle. The fact is, the corporate fishes have all been rotting from the head down for years now.
Most people forget, however, how this whole mess really got kicked off. Clinton jacked up taxes on "the rich." In response, executives started paying themselves primarily in stock options, which are taxed at CapGains rates, instead of as income.
The bottom line is that in any sort of free market economy, valuable people will get paid more by getting raises, or take their work experience to another company and get paid more there.
The way the oligarchy is combating meritocracy is to literally hollow out the entire economy. There's not enough decent jobs for everyone who is of true value.
And yes, there's a way to fix the CapGains "loophole" without discouraging investment. Simply allow the first $1 million of CapGains to be taxed as CapGains. Every dollar after that pays at the highest income bracket. No exceptions.
Also, we'd need to really clamp down on these fraudulent "chartitable" foundations, which are mainly tax shelters and money laundering for the oligarchy. Most do very little that is actually charitable.
Of course, until we End the f*-cking Fed and break the backs of the financiers and moneychangers, this talk is purely academic. Banksters conjure money out of thin air, give it to polticians, who buy votes from the FSA, thereby empowering those politicians to plunder the middle classes even further, thus reducing their ability to compete with the oligarchy.
Money is not the root of all evil. Banksters are. Money is merely a universal surrogate for goods and services, and enables many more and varied careers than does a barter system. But letting control of the money supply be in private hands, or in government hands without iron-clad rules governing its size, is the road to ruin, every time.
After the FED, the largest problem is there are no term limits. A must have.
Sadly, not true. For many years, I thought this. Then one day, several years ago, it occured to me that the only true effect of term limits would be to empower the unelected individuals, making the actual elected office holders into nothing but 100% actual puppets. The power would simply devolve one step back, to the senior staffers and lobbyists.
Earlier this year, I ran across this article. Guess what? I was right. Well, mostly. She says the House and Senate leaders wield far too much power now, too. But the unelected call the shots to the ordinary office holders with a timer hanging over their heads like the Sword of Damocles.
https://news.fiu.edu/2015/07/kathryn-a-depalo-floridas-term-limits-just-...
I sure do hate being right about stuff like this. It happens far too often.
Please Tylers, just stop it make it go away, I can't take anymore news no one else will print..this morning is like the smell of napalm and damn it, it hurts real bad.
Apparently the "gas dividend" is not being spent there.
This is a good start!
Welcome to Walmart. Good bye.
Instituting a maximum wage may have averted this problem. It could also have paid for the minimum wage. Wealth redistribution is going to happen one way or another, may as weel accept it and help it along all the while exising the real cancer at the heart of the system: greed and inequality.
You forgot the /sarcasm, people might mistake you for an idiot.
ZH needs to hire a decent web manager and stop this maintenance mode BS.
One enroute from India as we type!
The Free Shit Army needs to get off this website. Too many gender studies majors posting here.
"You forgot the /sarcasm, people might mistake you for an idiot."
No he was totally fucking accurate. The issue isn't hiking minimum wage; It's that the execs are getting paid too much. It's a fucking retail chain not a tech company FFS. Replace those useless cunts with an $80k accountant.
E commerce. .
Haha ..
Get my 7 dollar lettuce online....
Well folks, if this don't get you into Costco buying bulk beans and rice, then you are fvking blind and stupid.
Yes, go wallow around with the Indians at CostCo. I'd rather go to eFoods Direct and have it shipped to my house.
and yet somehow next month everything will be fine.
true prepping means digging in for the status quo to last our lifetime.
really hope Im wrong; tired of this.
No wonder Obama did the SOTU before the news - sneaky!
No shit, that POS is going to run for the exit with the stage on fire.. What a piece of work that guy is.. incredible.
US gov will prob close ZH soon.... too much truth and real news
But...but...but cronyade Obama said that the US wasn't in decline?
They will buy it with magic money and fill it full of Hufpost commenters.
You've seen the damage that Walmart have done to countless communities. What you didn't know was Bud Walton went to Wentworth Military Academy in Missouri. Their school mascot is The Red Dragon. I kid you not.
Another graduate was Ike Skelton, who was a Missouri representative from 1977 to 2011, and controlled the House Armed Services Committee. That's one reason why Whiteman Air Force base is in his district. These people are in office WAY TOO LONG.
It's just a "Rollback". Slap a yellow happy face on it.
Walmart closing will allow mom and pop shops to spring up and employ more people than are fired at W. What is really needed is the closing of all large retailers.
@sudzee: Absolutely!
Please explain how a company with the size and scale of WMT, that is closing its stores due to market conditions, will be replaced by companies with absolutely no scale and no efficiency which is why they went out of business to begin with.
it would be nice to see a lot of mom&pop shops come back...
Walmart closing will allow mom and pop shops to spring up and employ more people than are fired at W. What is really needed is the closing of all large retailers.
And sell them what? even Walmart cant get 22 ammo
Goodbye big business...hello again Mom & Pop's!
https://www.youtube.com/watch?v=gqsT4xnKZPg
Happy Days are Here Again!
Most people alive today probably don't remember life before Walmart! The boutiques are coming back.
Goodbye big business
Hello food stamps and soup kitchens
I am pro Mom & Pop's. But in most areas they really can not compete due to the economies of scale enjoyed by the big boys. Mom & Pop's usually have to work with middle men to acquire inventory and those distributors take a cut which means the Mom & Pop's have to charge more to still profit. Small businesses are the most competitive with services vs. products.
To me it looks like the sale of products is trending toward resale, dollar stores, and online sellers.
IME many times the local big box is OOS merchandise anyway and you can get what you want more quickly ordering online and getting it shipped.
No, the morons will order online and pay the $5- 8 dollars shipping while complaining about paying a local retailer $2-3 dollars more.
It's that new common core math for the younger crowd and double doses of lithium for us older folk.
Goodbye big business...hello again Mom & Pop's!
Goodbye big business, hello again Mom & Pop's...we missed you.
"As part of today’s action, the company will close 154 locations in the U.S., including the company’s 102 smallest format stores, Walmart Express, which had been in pilot since 2011'
I love doom porn as much as the next ZH-er, but c'mon. Two-thirds of the store closings in the USA are those that have only been around for five years or less.
I look at these store closings as a positive. I hate Wal-Mart. Close them all.
"I hate Wal-Mart. Close them all."
Butt hurt your interview didn't go so well for the "parking lot attendant" job opening?
The article's contention that Walmart is closing nearly 300 stores because it cannot 'afford' to pay a higher minimum wage is disingenuous.
A careful reading of the article also finds that Walmart will be opening over 300 stores and expanding others as well.
At best (or worst) Walmart appears to be slowing down in its expansion, and repositioning some of its stores. Possibly even, Walmart has reached a plateau and will begin to decline, though not quite yet.
Frankly, I'm not a fan of Walmart, but let's not try to make a mountain out of a molehill with sensationalist headlines and misleading conclusions.
You're right. But later in the article it says they're only planning on opening 200-240 stores. Just like the "plumbing problems" of 2014-15, the "300 new stores" are probably lipstick on a pig.
Yes. Not exactly shocking that they would be closing stores in Puerto Rico either.
http://lens.blogs.nytimes.com/2016/01/11/staying-put-amid-puerto-ricos-e...
Well, the article does say that the bulk of those store openings would be international. We can safely assume that the wages in those stores will be lower than in the USA, measured in dollars.
Government Spyware caused me to triple post.
Its not wages, they have capitol to pay and continue ......... 100 million people like me WONT SPEND A PENNY THERE AGAIN. CLOSE THOSE SHITHOLES DOWN !!!!!!
Have they released a list of the stores or locations to close?
Noon ET on their site.
I don’t understand why everyone bashes Walmart and not Target? Target only hires clean cut Yuppie looking workers and pays them about a 5 cents more than Walmart workers. Walmart does our nation a great service by hiring the unemployable dregs of society. I saw a 70 year old lady stocking shelves barely able to raise her arms above her shoulders. Target would never hire someone like that!