Walmart hikes minimum wage, announces layoffs

Walmart announces wage hikes, closure and layoffs on the same day
January 12, 2018

Transcript

Walmart is shutting down 62 Sam's Club stores and laying off about 7,500 workers.

That's according to Reuters sources.

In separate news, the company said it's hiking entry-level wages to US$11 an hour in February.

It's also offering a one-time cash bonus of up to $1,000 for its employees, and expanding maternity and parental leaves.

Joseph Agnese is a senior equity analyst at CFRA.

(SOUNDBITE): JOSEPH AGNESE, SENIOR EQUITY ANALYST, CFRA (ENGLISH) SAYING:

"We think the wage increase announced today will help satisfy their workforce in a very tight work environment, in a tight job market. This announcement today, and the increases that they're planning ahead, are following earlier increases that they've taken in 2015 and 2016, which initiated a three-year strategic plan to more aggressively pursue sales growth. We think having a better trained, more loyal workforce will help improve the customer experience in the stores, and help support future sales growth as well."

The wage hike comes as a result of last month's U.S. tax code overhaul.

The U.S. slashed the corporate tax rate to 21 from 35 per cent. Walmart is likely to save billions of dollars from it.

Analysts say the wage increases will cost the retailer only a fraction of those gains.

— Aleksandra Michalska