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After Tax Reform, Walmart Announces Bonuses (and Layoffs)

Topics: Current Events
Mike Mozart/Wikimedia Commons

Last week, Walmart made several announcements.

In February, the retailer will raise its starting wage to $11 per hour. Walmart will also expand its paid leave policy to provide 10 weeks of paid maternity and 6 weeks of paid paternity leave, and offer an adoption benefit of $5,000. Employees will also be eligible for a bonus of up to $1,000, depending on their tenure with the organization.

In a blog post on Walmart’s corporate site, CEO Doug MacMillon attributed these changes to tax reform:

As you know, the President and Congress have approved a lower business tax rate. Given these changes, we have an opportunity to accelerate a few pieces of our investment plan. We plan to continue investing in you, in our customers through lower prices, and in our future–especially in technology to help improve your jobs and the experience for our customers.

Layoffs at Sam’s Club Locations

On the same day, Walmart also announced that it will close 63 Sam’s Club locations across the U.S., affecting about 9,400 employees.

“In some cases, employees were not told their store had closed before showing up to work on Thursday,” wrote Hayley Peterson at Business Insider. “Those employees learned their store would be closing when they found the store’s doors locked and a notice announcing the closing, Sam’s Club workers told Business Insider. At some stores, employees were turned away by police officers.”

Other employees were notified via letters sent through FedEx.

A Walmart official told Peterson that 10 of the 63 stores will be turned into ecommerce distribution centers. Employees will be able to reapply for jobs at those locations. The remaining stores will close permanently.

The Fine Print on Bonuses

Laid-off employees are eligible for the bonus, which amounts to as much as $1,000 for employees who’ve worked for the company for 20-plus years.

Here’s the breakdown by employee tenure:

More than 20 years: $1,000

15 to 19 years: $750

10 to 14 years: $400

5 to 9 years: $300

2 to 4 years: $250

Less than 2 years: $200

Walmart, which is the largest private employer in the U.S., will spend $400 million on the one-time bonus.

“This represents less than 20% of Walmart’s tax savings which we expect will be invested in merchandise price reductions, employee training, omnichannel and other technology investments as well as share repurchases,” said Susquehana analyst Bill Dreher wrote in a note to clients, per CNBC.

Dreher noted that increasing wages should help the company stay competitive in a tight labor market, as well as boost sales.

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Jen Hubley Luckwaldt
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