Massive investment: An employee organises products in a Walmart Supercentre in New Jersey. The world’s largest retailer plans to increase investments in automation technology as part of its US$15bil (RM65.9bil) capital spending budget this year. — AP
NEW YORK: Walmart Inc says it expects about 65% of its stores to be serviced by automation by the end of its financial year 2026, just days after revealing plans to lay off more than 2,000 people at facilities that fulfill online orders.
The announcement at the US retail giant’s annual investor meeting in Tampa, Florida, comes as Walmart increasingly uses its huge stores to handle online-order deliveries and invests heavily in automation to speed up order processing at its eCommerce fulfillment facilities.
It was not immediately clear if this move would lead to more layoffs at the country’s biggest private employer, with about 1.7 million US workers and another 60,000 abroad.
The company said the moves would reduce the need for lower-paid roles.
“As the changes are implemented across the business, one of the outcomes will be roles that require less physical labour but have a higher rate of pay,” the Bentonville, Arkansas-based retailer said in a filing.
“Over time, the company anticipates increased throughput per person, due to the automation, while maintaining or even increasing its number of associates as new roles are created,” it added.
By January 2026, about 55% of packages that it processes through its fulfillment centres will be moved through automated facilities, improving unit cost averages by about 20%, the company said.
“This increased efficiency will not only support better inventory management, but it will also support Walmart’s rapidly growing eCommerce business,” Stephens Inc analyst Ben Bienvenu wrote in a note.
Walmart, which operates more than 5,000 US stores, did not immediately respond to questions about whether the moves would result in any near-term layoffs.
The world’s largest retailer by sales maintained its forecast for the financial year ending Jan 31, 2024, which calls for net sales to rise by 2.5% to 3% and earnings to increase from US$5.90 (RM25.94) to US$6.05 (RM26.59) per share.
It also kept its forecast for first-quarter sales to rise between 4.5% and 5% in constant currency.
Walmart has invested billions of dollars in technology for its online order facilities, including buying grocery robotics company Alert Innovation.
It is also partnering with companies such as Knapp to help cut the number of steps it takes for employees to process eCommerce orders, targeting to bring it down to five from 12.
On a post-earnings call in February, Walmart chief executive officer Doug McMillon said he was “most excited about the automation opportunity we have” with plans to increase investments in automation technology as part of its more than US$15bil (RM66bil) capital spending budget this year. — Reuters
