Walmart Cuts Workers’ Hours To Compensate For Increased Wages
Walmart announced that it will cut the number of hours of some of its workers in an attempt to control costs in light of investing $1 billion this year on increased wages and training.
According to Bloomberg, the retailer said earlier this month that it will keep a check on expenses by cutting hours added beyond what were allocated according to sales projections. A Walmart spokesman said that certain stores were over-scheduling workers beyond what was required for sales that the targeted locations were expected to churn.
“The reductions won’t affect efforts to better staff stores, shorten checkout lines, and improve cleanliness and stocking,” Walmart spokesman Kory Lundberg said.
A Walmart worker near Houston, speaking on anonymity, said the retailer had cut back nearly 200 hours a week by asking its workers to leave early. Another worker in Fort Worth said the store cut 1500 working hours and that employees working longer hours were asked to take two hour lunch breaks to compensate for those hours.
As part of the wage increase plan announced earlier this year, hourly workers have earned at least $9 per hour since April. Starting February 2016, their pay will bump up to $10 per hour. The retailer announced in June that it will up the wages of workers. It now plans to employ 8,000 new department managers and more 3,500 pickup department managers before end of the year, as reported by CBS News.
“The reduction in hours is taking place only in locations where managers have overscheduled workers, staffing the store for more time than they’ve been allotted,” Lundberg said in an email. “The reductions won’t affect efforts to better staff stores, shorten checkout lines, and improve cleanliness and stocking.”
Walmart lowered its annual earnings forecast earlier this month, which is partly based on the higher cost of employee compensation, as reported by ThinkProgress. The cost of higher pay was expected to reduce profit margin by 20 cents per stock share, but was later revised to 24 cents a share.
“The changes we need to make require investment, and we’re pleased with the steps we’ve taken,” CEO Doug McMillon said at the time. “Even if it’s not as fast as we’d like, the fundamentals of serving our customers are consistently improving, and it’s reflected in our comps and revenue growth.”
Lately, the retailer has been criticized for providing unsatisfactory customer service – complaints have been received of inadequately stocked shelves and empty lines. According to the American Customer Satisfaction Index, Walmart finds place among low ranking stores.
“We now have further evidence that Walmart’s so-called ‘wage increase’ was nothing more than a cruel PR stunt,” Jess Levin, a spokeswoman for the union-backed Making Change at Walmart campaign, wrote in an email. “Hard-working Walmart workers — many of whom did not even see a raise in pay — are having their hours cut all so Walmart can pad its bottom line.”
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