Dive Brief:
- Walmart is streamlining its global tech and Walmart U.S. operations, according to an internal memo Wednesday from Global CTO and Chief Development Officer Suresh Kumar and Walmart U.S. President and CEO John Furner, which the retailer shared with Retail Dive.
- A source familiar with the effort said the restructuring affects around 1,500 employees. In the memo, Kumar and Furner said they are “working closely with affected associates on their next steps, including other opportunities within Walmart where applicable.”
- Cuts to U.S. retail are mostly in the end-to-end operations teams as well as the Walmart Connect marketing organization. In tech, the company is “eliminating roles as well as opening some new roles,” as part of an effort “to remove layers and complexity, speed up decision-making, and help associates innovate rapidly.”
Dive Insight:
The cuts confirmed Thursday aren’t just about driving efficiency but also becoming more agile and innovative, according to the memo to employees from Kumar and Furner. The company has some momentum, with its U.S. e-commerce turning a profit for the first time in Q1. In their memo, Kumar and Furner describe a need to sharpen focus “to accelerate our progress delivering the experiences that will define the future of retail.”
“The world of technology is evolving at an unprecedented pace, and reshaping our structure allows us to accelerate how we deliver and adapt to the changing environment around us,” they also said.
When it released its Q1 report, the company provided Q2 sales guidance but declined to provide any range for operating income or earnings per share “given the dynamic nature of the backdrop, and the range of near-term outcomes being exceedingly wide and difficult to predict.”
The retail giant has been in the spotlight in the last week or so, following President Donald Trump’s message on social media Saturday that Walmart should “‘EAT THE TARIFFS,’ and not charge valued customers ANYTHING.”
The president was responding to executives’ statements to analysts last week that higher tariffs will inevitably mean higher prices on some goods. Walmart CEO Doug McMillon reiterated that the company is doing its “best to keep our prices as low as possible,” but warned that it can’t “absorb all the pressure.”