The new tax bill is expected to affect the majority of American workers starting in February, but already, some companies are planning ahead and enjoying the public relations boon of offering bonuses up front to their employees. Walmart was one such company, but a series of additional actions generated some backlash among consumers.
First, the positive: Walmart revealed that it would raise employees' starting hourly wage to $11, give eligible full- and part-time employees a one-time cash bonus, and expand maternity and parental leave benefits. The wage hike will take effect in February, reported Progressive Grocer (Jan. 11).
"Today, we are building on investments we've been making in associates, in their wages and skills development," Walmart president and CEO Doug McMillon said in the news release. "It's our people who make the difference and we appreciate how they work hard to make every day easier for busy families."
The response to this announcement was, unsurprisingly, overwhelmingly positive. However, it was a secondary news article that appeared the next day that riled up consumers.
Walmart noted it would close 63 Sam's Club stores, and will convert 10 to e-commerce distribution facilities. The closures will affect locations in 24 states and Puerto Rico, reported Business Insider (Jan. 11). Many workers at the affected locations said they were unaware of the company's plans. Some critics argued that the timing of the news was particularly tone-deaf: how could the company try to garner praise for increasing the minimum wage across the country the same day it announced it was sacking hundreds of jobs?
Well, the social media firestorm is likely to burn on a bit longer with developing news regarding the company's corporate structure. Walmart plans to cut over 1,000 corporate jobs, according to people familiar with the matter. The layoffs, expected to be completed by Jan. 31, 2019, will focus largely on employees in its corporate headquarters. Sources claim the retailer plans to remove about 3,500 store co-managers and add 1,700 assistant store managers as well, reported CNBC (Jan. 12).
Time will tell how Walmart reacts to the public relations storm it has wandered into, and perhaps it will weather the wear because of the new minimum wage and its massive effect across the nation. But one thing is for sure: one man's blunder is another man's opportunity: it's been reported by NJ.com that BJ's is already trying to poach staff from closed Sam's Club locations.
Chris is a business writer and market analyst that focuses on the Markets, Legal and Washington sections of the Food Institute Report. In addition, he assists in compiling data for various Food Institute publications throughout the year. He invites you to contact him via email at email@example.com to talk about anything food-related.
10 Mountainview Road
Upper Saddle River, NJ 07458
Food Institute reps are available to answer your questions
BECOME A MEMBER
For close to 90 years, The Food Institute has been the best "single source" for food industry executives, delivering actionable information daily via email updates, weekly through The Food Institute Report and via a comprehensive web research library. Our information gathering method is not just a "keyword search."