Walmart last spring said it was testing a sweeping overhaul that would make its stores better run and create more opportunities for employees to “do meaningful work.” The “Great Workplace” initiative, the retailer said, would be “the key to winning the future of retail.”
But nearly a year in, workers say the effort, which will reach 1,100 of the company’s 5,300 U.S. stores by year end, has led to widespread confusion.
Walmart, the nation’s largest private employer, is telling employees that it is doing away with certain positions – including hourly supervisors and assistant store managers – and replacing them with a smaller set of roles that carry more responsibilities, often for the same pay, according to interviews with current and former store employees, and internal documents obtained by The Washington Post.
Workers say they are being asked to apply, interview and test for new positions, essentially pitting them against their colleagues for a shrinking number of jobs. Some are terrified they will lose their job and insurance.
“Everyone’s on pins and needles right now,” said a customer service manager at a Neighborhood Market in South Carolina who has been working for Walmart for 14 years. Like other workers, she spoke on the condition of anonymity because she feared retaliation.
The store where she works, she said, is replacing six customer service managers with four newly created positions. Employees who don’t make the cut will either be terminated or asked to apply for lower-paying positions, according to two store employees briefed on the transition.
“People are worried they’re going to lose their jobs, their homes, their cars,” she said. “It’s very tense.”
The changes, executives say, are part of a broader plan to rethink the way stores and distribution centers operate as more sales move online. Walmart, based in Bentonville, Arkansas, has been investing heavily in advanced robots that can stock shelves, sort deliveries and scrub floors as it goes head-to-head with Amazon to stake out the future of retailing. The company also has spent billions of dollars buying e-commerce sites such as Jet.com and Bonobos, with mixed results. Last week Walmart said it would end its Jetblack personal shopping service and lay off nearly 300 employees in New York. (Jeff Bezos, the founder and chief executive of Amazon, owns The Washington Post.)
Walmart began testing small-scale changes to its store hierarchy two years ago, said Drew Holler, senior vice president of associate experience. It implemented its Great Workplace plan at 125 stores last year, and this year is expanding the program to all 688 of its small-format Neighborhood Market stores and about 400 of its 3,750 sprawling supercenters.
Holler said the program is being rolled out in certain departments first, such as fresh food, customer service, and stocking and replenishment. It was not clear, he said, how many positions would ultimately be affected. Neighborhood Market stores typically employ 90 people, while supercenters have about 300 workers.
The transition to Great Workplace is outlined in a 31-week blueprint distributed to store managers. The document, obtained by The Post, directs managers to identify and meet with affected workers and provides “talking points” on what to say to employees who are not selected for their preferred positions. On Week 25, the document says, store managers should “follow standard termination procedures for any active associate who has not been selected for another position in the company.”
“Terminations are part of the plan,” said Bianca Agustin, research director for United for Respect, an employee group that advocates for workers’ rights. “It’s clear that mid-level management positions are being eliminated. These are valuable employees who have been there a long time and have worked their way up the corporate ladder.”
Holler, the Walmart executive, said “the vast majority” of employees will “land the new role or find different opportunities within the store.” Those who don’t, he said, may be offered a severance package based on tenure.
The 14-year Walmart worker in South Carolina said the company offered her a $12,000 severance package – roughly equal to four months’ pay – in exchange for signing a nondisclosure agreement. She decided against it and is applying for a new position at her store. “Quitting is not an option,” she said. “I need a steady job and insurance for me and my kids.”
Workers with disciplinary records, unsatisfactory annual reviews and more than four absences are not allowed to apply for new positions, employees said, leaving some wondering what to do next.
“I feel stuck. I have no options,” said a customer service manager who says a disciplinary action on her record prevents her from applying for openings at the company. She says her manager is trying to help, but so far she’s gotten few answers. Interviews for new positions are scheduled for the coming week.
“I have so much anxiety because of this,” she said. “I have a child, I have bills to pay.”
Holler said the moves are a response to changing technology. With technology taking on more “mundane and repetitive” tasks, he said, Walmart has shifted its focus to rethinking employee roles.
“We can take the tasks that are left and bundle them together to get great new jobs,” he said. The new positions, he said, come with additional responsibilities and more consistent schedules.
“Over the last few years we’ve noticed fundamental shifts: Customers are changing, work is changing, and our associates are changing as well,” Holler said. “We tried to weave all that together.”
The shifts come amid increasing turmoil in the retail industry, which last year cut 77,000 jobs, more than any other sector. Macy’s is laying off 2,000 employees, while Kohl’s and Wayfair announced last week they would cut between 250 and 300 jobs apiece.
Walmart, which has 1.5 million U.S. employees, is the country’s largest employer. The retail giant raised its hourly starting wage two years ago, from $9 to $11, to keep up with higher-paying competitors such as Target, Costco and CVS. Full-time U.S. employees now make an average $14.35 an hour, according to the company. Walmart does not disclose average pay for part-time workers, who make up about 45 percent of its U.S. workforce. The company reports quarterly earnings Tuesday morning.
Holler said it was not clear how Great Workplace will affect overall hourly wages, but said “a lot of individuals would get a promotion out of this.” Supervisors who previously made a starting hourly wage of $13, for example, could make $18 to $25 an hour if hired as a “team lead,” he said. But internal documents showed that wages could remain flat for other workers, even with promotions. Hourly wages for the new academy trainer position, for example, begin at $11, which is the starting wage for all Walmart employees.
In interviews, employees called the program “convoluted” and unnecessary, particularly in an industry known for its high turnover rates. If Walmart wants to thin its ranks, it could have done so by attrition, they said, without actively terminating longtime employees.
“They say it’s going to be better for customers, but I’m asking my manager how and they can’t tell me,” a Neighborhood Market employee said. “I work hard. I’ve earned what I have. For them to say I have to reapply for a job – why?”
Store managers, she said, have been directing employees with questions to an internal computer system with information about the transition.
But answers can be inconsistent: One worker said she was originally told she would make $2 more an hour if she became an academy trainer; a week later, she was told her pay would remain the same if she took the job. A co-worker was told they would lose 75 cents per hour but have more responsibilities under the new plan.
LuAnn Turnage quit her job in November, after two years as a customer service manager at a Plainwell, Michigan, supercenter. She said the store was in the process of replacing five customer service managers with one team lead. Turnage, who is a member of United for Respect, applied for the new position but wasn’t selected. She quit, she said, because she thought her only other option was to take a demotion or a pay cut.
“It’s unfortunate because I liked my job – actually, I loved my job,” said Turnage, 63, who was making $15 an hour and is still looking for work. “But I’ve been in management for 30 years. I wasn’t going to step down to cashier.”