Business

Walmart cuts starting pay for new hires who prepare online orders, stock shelves

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A worker stocks the shelves at a Walmart store on January 24, 2023 in Miami, Florida. Walmart announced that it is raising its minimum wage for store employees in early March, store employees will make between $14 and $19 an hour. 
Joe Raedle | Getty Images News | Getty Images

Walmart has cut starting pay for new store employees who pick and pack online orders and stock shelves, raising questions of whether companies face a cooling labor market or are adjusting to a return to pre-pandemic shopping habits.

The retailer confirmed that starting wages were reduced in July for personal shoppers and stockers who now join the company. Those workers help prepare orders for curbside pickup or delivery to customers’ homes and replenish store shelves.

New Walmart employees who join the digital or stocking teams now make about a dollar-an-hour less than they would have if hired several months ago.

Walmart spokeswoman Anne Hatfield said no current employees in those roles had their pay cut. As part of the change in July, Walmart also tweaked pay bands for more experienced employees, leading to a wage raise for approximately 50,000 store employees, she said.

Walmart, as the biggest private employer in the U.S. with 1.6 million people, is a closely watched company for economists and industry leaders — including many who have scoured for signs of whether inflation of wages and of merchandise is cooling. It had hiked its minimum wage for store employees from $12 to $14 in January, as the labor market remained tight and its pay trailed behind rivals like Amazon and Target.

Hatfield declined to say if the company has seen it become easier to hire.

In a statement, Walmart said it made the change so its starting pay was consistent, whether a store employee worked at the cashier, stocked shelves or helped with online orders.

“Consistent starting pay results in consistent staffing and better customer service while also creating new opportunities for associates to gain new skills from experience across the store and lay the groundwork for their career regardless of where they start,” the statement said.

The news of wage changes was first reported by The Wall Street Journal.

The higher pay took effect in March 2021 for Walmart’s personal shoppers and stockers. It raised wages for 425,000 employees, making their starting rates range from $13 to $19 per hour, based on the store’s location and market.

With the move, Walmart treated those employees more like specialists. It also has higher starting pay for some other roles, such as employees who decorate cakes in its bakery or change oil in its auto centers.

At the time of the change, the big-box retailer was seeing higher grocery and e-commerce sales. More Americans were getting vaccinated for Covid-19 and springing for items to help them get out and about again, such as teeth whitener.

In a company memo announcing the change at the time, Walmart U.S. CEO John Furner cited the sharp growth in company sales. Along with seeing overall sales grow, he said the company picked 6 billion items for pickup and delivery in the previous year and had to move fast to keep up with fast-changing customer shopping habits.

Many retailers have seen shoppers return to more typical pre-pandemic shopping habits like visiting stores more and shopping less online — along with being more discerning about discretionary purchases. That’s led to declining e-commerce sales at companies including Macy’s and Target.

Walmart has continued to put up strong online sales growth. E-commerce sales for Walmart U.S. jumped 24% year over year in the fiscal second quarter, its most recently reported three-month period. But that is not as dramatic as the gains that the company posted during the early years of the pandemic.

Shares of Walmart touched a 52-week high on Thursday. So far this year, Walmart’s shares are up about 15%, just shy of the gains of the S&P 500 but ahead of many other retailers.

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