Over the summer, retail giant Walmart raised its company wages across the board, and the move earned widespread praise from those demanding a “living wage” for low-skilled positions. However, as with everything else, actions have consequences, and the company just made a major announcement about 296 of its retail locations.
In June, Walmart announced that it was going to increase its starting wages for over 100,000 of its workers, including department managers and workers in specialized divisions, according to The Week. In the same announcement, the company said that come February, its minimum starting wage would be increased from $9 per hour to $10 per hour, and it looks like it might be preparing for the increases with its intended plans for 296 stores.
In an effort to stay competitive in the markets, 154 of its U.S. locations are going to be shut down for good, and another 115 locations will close in Brazil, according to WPTV. The move will affect only a fraction of its 11,000 stores worldwide, but 10 percent of the 100,000 U.S. employees who received a raise will no longer have a job.
In total, 16,000 employees between the two nations will be laid off, with 10,000 of the layoffs happening in America at small front stores called Walmart Express. While the company claims the closings have little to do with the increased wages, it’s also saying that a large determining factor in closing the locations was whether they were performing financially, and the largest overhead in any business is labor.
Fortunately, the company is offering those affected 60 days’ pay and, if they’re eligible, a severance package. There’s also the possibility that some could be rehired at a nearby location, but it remains to be seen whether they are.