Walmart, America’s largest retailer, has been struggling to find its footing in the quickly evolving economy.
Walmart announced Friday it will be closing 269 ‘underperforming’ stores worldwide — forcing 16,000 associates affected by the closures out of work if they can’t be transferred to nearby stores.
Beginning next month, 154 stores in the U.S. and 115 in Latin America — including all 102 Walmart Express locations, which haven’t been profitable — will shutter their doors for good “as the company works to invest more money in e-commerce activities and wage growth for store employees,” reported the Wall Street Journal.
Walmart claims it will attempt to place the now-jobless employees in positions at stores close by, but if it is unable to do so, the employees will receive 60 days and severance — if they’re ‘eligible’ — as well as resume aid and skills training for future job interviews.
“The decision to close stores is difficult and we care about the associates who will be impacted,” claimed Walmart CEO Doug McMillon in a statement. “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.”
Some might say there’s a first time for everything.
Walmart notoriously underpays its employees, who are often forced to rely on government programs to avoid abject poverty. As a report by Americans for Tax Fairness, Walmart on Tax Day: How Taxpayers Subsidize America’s Biggest Employer and Richest Family, revealed on April 15, 2014 [with all numbers relevant to that date, of course]:
“Walmart is the largest private employer in the United States, with 1.4 million employees. The company, which is number one on the Fortune 500 in 2013 and number two on the Global 500, had $16 billion in profits [in 2013] on revenues of $473 billion. The Walton family, which owns more than 50 percent of Walmart shares, reaps billions in annual dividends from the company. The six Walton heirs are the wealthiest family in America, with a net worth of $148.8 billion. Collectively, these six Waltons have more wealth than 49 million American families combined.”
In April 2015, the mega-corporation was again at least partly the focus of a similar study, The High Public Cost of Low Wages, by researchers from the Labor Center at the University of California, Berkeley. They found “low wages cost U.S. taxpayers $152.8 billion each year in public support for working families.”
“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,” Walmart’s statement reads.
A partial list of the impacted stores has also been published in the company’s press release, with closings dates appearing to begin as early as Monday.
Though the number of store closings seems high, with 11,500 total retail stores around the world — 4,500 of those in the United States — it represents less than 1% of Walmart’s global revenue. The mega-corporation’s payroll comprises 2.2 million people around the world, including 1.3 million in the U.S.
Walmart still plans to “open well more than 300 stores around the world next year,” and in conjunction with the announced closures, the resulting ‘portfolio management’ is the company’s effort to maintain a “healthy business,” as McMillon explained.
Sixty stores in Brazil, included in the total closures announced today, have already shut down due to lackluster profits and a tanking economy in that country.
However the company frames it — and no matter your views about corporate self-preservation — Walmart’s business practices cannot possibly be called ethical. Punishingly low wages are awful enough for those who are often prevented from maintaining full-time hours by such employers, and now 16,000 of them will have to start over with a fresh job search — with virtually no warning given.
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