Dive Brief:

• Walmart will lay off 1,241 employees in Arkansas and New Jersey on Jan. 31, according to Worker Adjustment and Retraining Notifications filed with authorities in those states. The cuts are intended to bolster Walmart's omnichannel operations, according to a July memo in which the retailer internally announced layoffs were imminent.
• "We are streamlining some roles so we can be more effective and efficient. At the same time, we are creating new roles, particularly in the supply chain, in our stores, and in other facilities which will open up new opportunities," said the memo from U.S. CEO John Furner and U.S. E-commerce CEO Marc Lore, obtained by Retail Dive. Affected employees can apply for other open positions within the company, according to the memo.
• The affected employees were notified "four months ago," according to the Arkansas WARN notice, which said the layoffs will be permanent. "Those who take new roles at Walmart will receive one year of salary protection and their target bonus for the year. In the case of associates who do not assume a new role in the coming months, they will receive their target bonus for the year, transition benefits and severance, as eligible," a Walmart spokesperson said via email Monday. The spokesperson did not confirm if additional states were affected in time for publication.

Dive Insight:

Walmart's 1,241 layoffs are the next step in a series of moves Lore and Furner called "a path to transform into an omnichannel organization," in the memo announcing the layoffs. Walmart is headquartered in Bentonville, Arkansas, and the offices of Walmart's 2014 acquisition, Jet.com — now incorporated into Walmart.com — are in Hoboken, New Jersey.

Steps along this path include major changes to how its buying and operations teams are organized.

Executive Vice President of Supply Chain Greg Smith became the central manager for all of Walmart's supply chain functions in July 2019. The company combined its in-store and online buying and merchandising teams in February. It ceased operating Jet.com to concentrate omnichannel talent on Walmart.com. And it launched two test stores to pioneer new technologies and operational strategies aimed at combining online and in-store inventory, speeding shelf replenishment and in-store pick rates.

The path to omnichannel also steers hiring toward the supply chain. Walmart in September announced plans to hire more than 20,000 seasonal associates for its e-commerce fulfillment centers.

The pandemic has generated a step-change in consumer behavior, increasing the urgency with which retailers develop omnichannel offerings, from curbside pickup to ship from store. Walmart CEO Doug McMillon said Walmart customers had jumped forward two to three years in omnichannel adoption due to the pandemic, on the company's Q3 earnings call. The retailer reported 79% YoY growth of U.S. e-commerce net sales in Q3.

Walmart's work to reorganize around an omnichannel strategy has been years in the making, but this round of layoffs comes after months of elevated unemployment rates across the U.S due to the pandemic.

Arkansas' unemployment rate peaked at 10.8% in April and fell to a preliminary estimate of 6.2% in October, according to the Bureau of Labor Statistics. New Jersey's unemployment rate peaked in June at 16.8% in the third of three months above 15%. The Garden State's unemployment rate fell to 8.2% in October — a preliminary figure from BLS.