Just one day after announcing that it would raise starting wages for its hourly workers, a report said Wal-Mart is planning to eliminate more than 1,000 jobs, mostly at its headquarters.
The cuts, which are expected to be completed this month, were reported by the Wall Street Journal. A Wal-Mart spokesperson would not confirm the planned cuts, but did say the company had been “looking at our structure for some time as we explore ways to operate more effectively.”
In addition to the corporate job cuts, Wal-Mart has also announced the closure of 63 of its Sam’s Club warehouse locations, which will mean as many as 11,000 lost jobs. The Journal frames the restructuring as part of Wal-Mart’s efforts to respond to Amazon, which aggressively expanded with its 2017 purchase of Whole Foods. Rumors have also been swirling that Amazon could make a bid this year for Target, a big-box retailer that directly competes with Wal-Mart.
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Wal-Mart’s announcement that it would raise starting wages for store workers from $9 to $11 an hour has been one of several wage hikes and worker bonuses following passage of a huge cut in the corporate tax rate. But the fact that job cuts are happening at the same time, without being blamed on the tax overhaul, shows that those wage hikes and bonuses are being carefully framed to make a specific point.
Their timing is intended to support the political thesis that tax cuts will benefit workers, but many economists and other experts argue that most of the benefit will actually accrue to shareholders. Wage hikes like Wal-Mart’s may be in response to unrelated factors like tight labor markets and state and local laws raising minimum wages — just as the simultaneous job cuts and store closures have little or nothing to do with tax policy.
In the meantime, the GOP is already preparing to slash entitlement programs like Social Security and Medicaid to offset the debt created by the tax cuts. Public assistance programs have long been particularly important to low-wage Wal-Mart employees.