The Minimum Wage Pain Continues: Hundreds More To Be Fired At Walmart

Tyler Durden's picture

Walmart reported relatively decent Q1 results, however one item that was apparent is that costs are still a factor in the business, as operating income was lower y/y even on increased revenues.

We've discussed many times the fact that Walmart has been overly eager to boost everyone's wage in order to appease the living wage crowd, and as a result the company has had to move forward with massive layoffs and store closings to try and mitigate the impact on profits. Earlier this month we also noted that Walmart is testing out drones that when operational, will be able to carry out what once were human tasks in its large distribution centers. This effort will further position the company to be able to shed more labor and benefit expense in the future. That said, Walmart isn't waiting for the drone initiative to come online.

The company recently announced that the accounting function at roughly 500 stores, mostly on the West Coast, will be eliminated and the job responsibilities will be handled by a shared service center at Walmart's Bentonville, Arkansas headquarters the WSJ reports. The function was used to count cash, as well as handle invoicing for companies that bring product directly to the store instead of the warehouse. Invoicing will move to Bentonville, and machines will now be used to count the cash at each location. Mark Ibbotson, executive VP for central operations at Walmart US said the current system is dated and error-prone, "we really want to pull our workforce onto the floor" - yes, or reduce headcount and labor costs, one of the two.

Walmart says the affected workers have been offered othere consumer facing store positions, though they aren't guaranteed the same hourly wage. Although workers would take a step down in pay, making $17.55 an hour, Walmart only expects 1% of the employees affected to leave the company. Said otherwise, either way, costs have been reduced, and those employees will just be swept up in the next round of layoffs down the road.

For now, the store employee changes are "pilot", and "if we are happy, if everything follows, we will consider the next phase" Ibbotson said.

The next phase Ibbotson mentions is obviously more efficiency gains and subsequent layoffs - however if there needs to be a silver lining, at least the Walmart Greeter has returned...

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SilverRhino's picture

On the brightside Arkansas just picked up a shitload of accounting jobs.   

wee-weed up's picture

Same workload + less employees = even shittier Walmart service to its customers.

booboo's picture

So this guy Ibbotson, was he a droid?

johngaltfla's picture

Have no fear, R2D2 is here!

RafterManFMJ's picture

By Ed Smith's math, the CEO of Walmart earns more in an hour than his employees will earn in a year. Smith, an alderman in Chicago, presented posters at a city council meeting showing that Walmart CEO Michael Duke's $35 million salary, when converted to an hourly wage, worked out to $16,826.92.

****

Thank god the CEO isn't starving, I was fucking worried.

bigfire's picture

If you don't like how much he makes, you have 2 choices.  Don't shop there, or own enough stocks to strip him of his pay. 

RAT005's picture

Fundamentally, you're correct but with public companies there isn't much of a feedback loop to better do what you say.  Each company board approves high executive pay and in return other boards approve other company's high executive pay. It's kind of an elite good old boys club (with women members).

Boris Alatovkrap's picture

Economic Reality of Minimum Wage is not $15 per hour, but is $0 per hour when job you are seek is no longer worth $15 per hour to employer. Ouch! I say, Ouch!

gruden's picture

Ask corporate 'activist' Carl Icahn how well the second option works.  You're just not going to be able to buy enough voting stock to throw your weight around like that, even if you're a big baller.  Overpaying CEOs is rampant in our corporate culture.  At this point all that's left is to watch how the fallout of wealth disparity plays out in this country.

MarlasBack's picture

The best reason I can think of to not like it is because the target here is the employee.  Like making a fair wage is a chrime, oh wait, it is in this country.  So instead of talking about how the owners don't scale back their take, just a tiiiiiiny bit, everyone talks about how unfair the raise is... boo hoo hoo

Who are the real losers? yeah, got it.

just the tip's picture

with walmart there is not a bright side, just a different side.  back when they raised the minimum wage at all the stores, they had to let a lot of employees go at the bentonville headquarters.  this sounds like a hire back.

Sanctuary2's picture

So you are in favour of lowering WALMART wages, so they can qualify to go on FOOD STAMPS/MEDICAID CARDS?

You still pay for it!

junction's picture

Lost in this discussion is the some 3 trillion dollars Bush and Obummer funneded to Iraq and Afghanistan that mostly went into the pockets of war profiteers like Senator Feinstein, Representative Pelosi, Carlyle Group and defense contractors.  That money was paid for by the vanishing American middle class, companies like Apple and hedge fund billionaires like Soros pay no taxes on sheltered income.  The USA is one big bust out operation.  And you can be ceratin that Zuckerberg did not create Facebook, he just put his name on the near finished product created by who knows what, whether some secret group working for the NWO or some alien intelligence that wants world control.  

odatruf's picture

It wasn't lost in this conversation; it has nothing to do with it. Fuckwad.

And no, the middle class didn't pay for Iraq anyway. It hasn't been paid for by anyone yet.

Badsamm's picture

It's good for robots no?

More Ammo's picture

This article is using a false premise, sorry Tylers, you are wrong on this one.

Don't get me wrong, Walmart is still a major player in the Clinton Crime Cartel but this is a tech thing.

What this is really about:

Three years ago Walmart initiated a plan to force all DSD (Direct Store Deliver) vendors to do EDI (all electronic, no paper) invoicing with the plan to do away with these jobs.  It cost my company $30,000 in various software and services to set it up, I know, I was/am in charge of the project.  It is now fully implemented an the jobs are no longer necessary in the stores to process the paper invoices as there are none.  Computers match up and pay the invoices with almost no human intervention even in Bentonville, we don't even get a check, all electronic.

onewayticket2's picture

IF they "identify" as employed, will the govt mandate Walmart continue to pay them?

Raffie's picture

Soon the g00berment will be making employment/unemployment charts for robots....

Don't look shocked when it happens.

Nobodys Home's picture

Wewcome to Walmaht! Wanna sticka?

blue51's picture

Nobody's, did I see you at the Walmaht in Revere ?   https://youtu.be/1L3dYN4b9pI

 

 

redc1c4's picture

#Unexpectedly!

even Stevie Wonder say this coming.

NurseRatched's picture

WalMart says  "we really want to pull our workforce onto the floor' for the same reason gay assassin Omar Marteen really wanted all the patrons of the Pulse in the same bathroom: it is so much more effective to fire at a group when they are all in the same place.

Shpedly's picture

Well you kinda get what you pay for. It's definitely not Barneys NY.

undertow1141's picture

Welcome to Costco I love you.

Katos's picture

The bottom line here is that the billionaire children of Sam Walton refuse to recieve less billions a year than what they are accustomed to receiving. Having 40 or 50 billion dollars each is just not enough.  So they will not under any circumstances give a shit about their slave labor, if it means anything less than what they currently get. These are some greedy mother Fulkerson. Sam Walton had a company wide profit sharing plan, where even the lowest paid worker still received a percentage of the profits. Sam knew that without good employees your business wouldn't grow. His golden spoon fed children never figured that part out. They just see them all as slaves, peasants.

WorkingClassMan's picture

And I sleep better thinking that when the system that protects and nurtures their rapacious greed finally collapses...so will they soon after.

silverer's picture

I wonder if all these fired former Walmart employees still will shop at Walmart?

Paul Kersey's picture

If only we could fire Walmart. Walmart built a Walmart Express in Oriental, NC, a sailing and retirement town, and set its food prices low enough to shut down the Town and Country market, that had been there in the town for over three decades. The grocery in the neighboring town of Arapaho also went out of business. Within months of that, Walmart shut down its new Express store, and built a larger Walmart Neighborhood Market twelve miles down the road. It's the predatory pricing scam that Walmart has done time after time, killing small communities. Fuck Walmart.

Oriental photos and demos:

http://www.city-data.com/city/Oriental-North-Carolina.html

Freddie's picture

Contact Aldi.  Aldi is a German owned company started and owned by a Catholic family.  They own Aldi and Trader Joes.  Tell the, to come to Oriental.

Aldi kicked Wal Mart's ass so hard in Germany that WMT left Germany.  Trader Joe's alsoo kicks Whiole Food's ass. A friend's kid went to work at Whole Foods and they are as*sholes. 

ToSoft4Truth's picture

Inversely, "Today more burden in the form of EBT and credits was clearly shifted to the remaining few tax-payers... Does Kardashian have an implant-ass? news at 11.' 

Infield_Fly's picture
Infield_Fly (not verified) Jun 16, 2016 6:17 PM

And the assholes that created the $15 per hour min wage - they knew what they were doing and where this would go.

 

See what happens when a marxist pig is allowed in the white house for too long??

 

Economic suicide for everyone.

ToSoft4Truth's picture

The laid off must adapt or die. 

N0TaREALmerican's picture
N0TaREALmerican (not verified) ToSoft4Truth Jun 16, 2016 6:30 PM

 

Usually they vote socialist.

45North1's picture

There are alot of workplace functions that can be done for < $15:00/hour by a machine, very cost effectively.

More Ammo's picture

 

45north,  You speak the truth and get down arrows....

I know for a fact that is exactly what happenen in this case...

GooseShtepping Moron's picture

I'm a little surprised at Zero Hedge not looking at the big picture and just parroting the tired old libertarian talking points instead. This has absolutely butt-fuck nothing to do with the minimum wage. It has to do with an unsustainable retail model that is failing in multiple dimensions at once, and with the general global downturn that is hurting the economy in many interdependent, intersecting ways.

For years Wal-Mart has attempted to use a panopticonic style of Command-and Control management with respect to logistics, personnel, and scheduling which increasingly atomizes the organic nature of the company and results in a cacophony of mutually antagonistic sub-goals. Imagine if you took all the lib-tard idiots who use to sit on your high school's student council, who only know how to group-think in predetermined PC templates, let them write a bunch of algorithms to replace competent management, and then let the algos run the company into the ground. That's really what's going on at Wal-Mart. It's the tyranny of consulting firms who mine terabytes of data out of customers' transactions and then promise to write programs and implement "best practices" that will improve efficiency, but only result in destroying the esprit of the workplace and liquidating the practical knowledge that skilled retailers have built up over generations, all of it funded by QE and mandated by the corporate board. Wal-Mart the retailer is being asset-mined to flood the pockets of the C-suite with collateral.

Believe me. My family and I have worked for years in Big Box retail. I've seen how this goes.

More Ammo's picture

Goose, you are spot on, Walmart did it to us two and a half years ago and H (big TX Grocer chain) is doing it to us now.  Moving everyone to EDI and farmed it all out to some gouging VAN, told H they would set it all up for free but they are charging each vendor a $500 "testing" fee.  We have already been doing EDI with H for years and now they want us to pay them the "testing" fee on an already functioning system...

Last of the Middle Class's picture

I'm pissing my pants laughing at the irony. The one thing that will save them from the Amazon business plan imminently crawling up the ass is customer service. EVERYONE hates standing in line while the unconcerned wallyworld cashier looks for a missing barcode. The age of Wallyworld is over. Thank God for small favors. Not to mention their stores smell like week old ass.

adr's picture

The not actually making a profit business model?

I only buy one or two products from Amazon a year, sometimes none at all. I can't stand the endless spam of, Check out what we picked for you based on your purchase, emails. Guess what Amazon you're usually 100% wrong with your predictions.

I recently bought a $110 piece of furniture that had free shipping. It weighs 145lbs. Based on my UPS corporate account I checked what shipping that piece of furniture would cost to ship by UPS ground, $87.38.

So Amazon paid $87 to ship me something that cost $110. Even giving Amazon a 70% gross margin they lost money selling me that product. Realistic wholesale on the product is about $40 so cost plus shipping was $127. I don't think losing $17 on a sale is a sustainable business model.

Shpedly's picture

Your right on point. The spam and pop ups are the worst. Hell, I get on Amazon and the first pop up is "do you want to donate to charity" before I have even entered a search for something. WTH!

More Ammo's picture

adr, they have to be getting VERY special rates.  Like ATT,  when I order extra SIM cards they send the FEDX second day and each in its own evelope, all free of charge.  Then there is Walmart, I ordered two phones with expedited, FEDX next day air from CO to TX our dock and they sent each in its own box for $12.  Was looking at ordering a lawn mower from Lowes because the one I want is not on the shelf, $375 free shipping to home for 135 lb box and it is a big box....

I ship a lot of small equipment around TX and a small 1lb box is $9.95 for 3 day ground,  getting shafted...

Pop3y3too's picture

I went to the local Wally World in the early afternoon to have a key made.  I wasn't surprised to find noone at the sporting goods counter where the key cutting machine is at this particular store. There's never anyone there when I want ammo either, go figure.

 

I started walking the isles looking for an employee to help me.  I made it half way through the store without seeing a single employee and made it all the way back to the back "Customer Service" counter only to find it also empty. 

 

I finally found a mouth breather at the Cell Phone counter. He said he could not help me but promised to get someone back there to assist.  Ok, great...I'll just make my way back to the sporting goods counter.  I made it all the way back to keys before I finally heard "Customer needs assistance in sporting goods." 

 

I waited 5 minutes. Nothing. At this point I'm regretting not going to the downtown ACE hardware to get this done because I know the owner there would have cut me a key in minutes.  So....back to the mouth breather again who said he'd call a manager.  A very young "Manager" finally showed up with a red nose and snot running down her face looking like she had contracted a full blown case of ZikaBolamonia.  It was a minor miracle that she knew how to run the key cutting machine.  

 

What a crap hole that store has become. 

 

More Ammo's picture

What a crap hole that store has become.

Hey Pop, "become" ???? it has always been a crap hole from the first walmart store, I was 6 when it was built less than a half mile from my house...

CheapBastard's picture

There's plenty of Soweto-created shovel ready jobs out there...too bad they're all taken by foreigners.

Duc888's picture

 

Help wanted in Vermont.

 

Here's a real live help wanted add in Craigslist in Vermont.  Maybe the ex-Walmart employees can help train foreign troops how to handle US civilians in the course of a complete civil melt down.  Read this add. 

1. You must speak / understand English.

http://vermont.craigslist.org/gov/5632625856.html

Wanted: actors.

Hmmmmmmmmm lets see, there's a ANG base there.  I'd assume the US military there speaks English.  So who would this language company working in conjunction with US military be trying to teach English too?

 

 

Herdee's picture

Amazon alone is putting those assholes out of business.The management of WalMart should be jailed for all the money they send offshore each and every day.Pure scum that family and their ass kissers.

NoWayJose's picture

My future is secure - they can never get rid of old farts who want to be Walmart greeters. Their real purpose is not to 'greet' but rather to stop and check carts for unpaid items. Chopping greeters would open a floodgate of unpaid merchandise heading out the door!

They also can't get rid of cart wranglers - my other 'dream job' for a part time retirement job.