Company closing dozens of Sam's Clubs locations
NEW YORK -- Walmart confirmed Thursday that it is closing dozens of Sam's Club warehouse stores -- a move that a union-backed group estimated could cost thousands of jobs -- on the same day the company announced that it was boosting its starting salary for U.S. workers and handing out bonuses.
The world's largest private employer said it was closing 63 of its 660 Sam's Clubs over the next weeks, with some shut already.
Ten are being converted into e-commerce distribution centers, according to a company official who spoke on condition of anonymity because he was not authorized to discuss details of the decision publicly.
He said it was too early to say how many people overall would lose their jobs since some will be placed at other Walmart locations or rehired at the e-commerce sites. Making Change at Walmart, a campaign backed by the United Food and Commercial Workers International Union, estimates that 150 to 160 people work at each Sam's Club store, meaning the closures could affect about 10,000 people.
Lauren Fitz, 22, said she was at her other job as a church secretary when a colleague texted to say that the Sam's Club where they both worked in Loveland, Ohio, had closed. Fitz had been pleased earlier to read the news that Walmart was boosting starting salaries and offering bonuses.
"I thought, 'This is really cool.' And then to find out that my store is closing," said Fitz, who said she had worked as a sales associate in the jewelry department for two months. At home, she got a call from her manager and had a letter in the mail saying the store had closed and she could seek employment at another Sam's Club or Walmart store.
"It was very sudden and very shocking," Fitz said. "I don't think our managers had any inkling yesterday. It was a normal shift."
On Twitter, Sam's Club responded to people's queries by saying, "After a thorough review of our existing portfolio, we've decided to close a series of clubs and better align our locations with our strategy."
Local news reports said Sam's Clubs stores were closing in Texas, California, New Jersey, Ohio, Indiana and Alaska, among other states.
Earlier in the day, Walmart had cited the sweeping Republican tax overhaul that will save it money in announcing the higher hourly wages, one-time bonuses and expanded parental benefits that will affect more than a million hourly workers in the U.S.
President Donald Trump cheered the announcement with a tweet, saying, "Great news, as a result of our TAX CUTS & JOBS ACT!" White House spokeswoman Sarah Huckabee Sanders later said she would not comment on the Sam's Club closings but that the wage increases were a sign that the tax measures "are having the impact that we had hoped."
Walmart representatives did not respond to a question about the timing of the dual developments.
"This is nothing but another public relations stunt from Walmart to distract from the reality that they are laying off thousands of workers," said Randy Parraz, a director of Making Change at Walmart.
Rising wages reflect a generally tight labor market. The conversion of stores to e-commerce sites also illustrates how companies are trying to leverage their store locations to better compete against Amazon as shopping moves online.
Online retailers typically pay warehouse employees who pack and ship orders more than store jobs pay. Job postings at an Amazon warehouse in Ohio, for example, offer a starting pay of $14.50 an hour.
"This is about the evolution of retail," said Michael Mandel, chief economic strategist at the Progressive Policy Institute. "The rise of e-commerce is leading to higher wages."
Large employers also have been under pressure to boost benefits for workers because unemployment rates are at historic lows, allowing job seekers to be pickier.
But the low unemployment has meant that retailers have had trouble attracting and keeping talented workers, experts said. Walmart employees previously started at $9 an hour, with a rise to $10 after completing a training program. Target had raised its minimum hourly wage to $11 in October, and said it would raise wages to $15 by the end of 2020.