Walmart Cut Employee Hours So Drastically They Can't Keep Shelves Stocked, Losing Customers
Customers shop at a Walmart Neighborhood Market store in Chicago, Illinois. US retail sales edged higher in August at a weaker than expected pace, led by auto and home furnishing sales, official data released Friday showed.
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After cutting employees’ hours so deeply that stores could not keep their shelves stocked, Walmart is adding more full-time workers in time for the holiday shopping season. The retail giant has been shedding customersrecently due to disorganized stores and empty shelves.
Walmart started aggressively cutting staff during the recession. Over the past five years, its total American workforce dropped by 120,000, even as the company opened more than 500 new U.S. stores. The result is longer check-out lines, backlogged inventory, and poor customer service — not to mention employee protests all over the country. Now, amid plunging sales and massive strikes, even Walmart has conceded it can’t run a business on a skeleton crew. Over the next few months, the company will move 35,000 part-time workers to full-time, and another 35,000 temporary workers will become part-time staff.
After the Affordable Care Act kicks in January 1, Walmart’s new full-time employees will be eligible for health insurance after 90 days, a vast improvement on the retailer’s usual 6-month waiting period. To qualify for benefits, part-time staff must work an average of 30 hours a week for a year — no small feat at a company known to abruptly cancel shifts, cut hours, and lay off workers at any moment.
While most stores will hire an army of temporary workers to handle the holiday season rush, Walmart has been relying almost exclusively on temps year-round. A Reuters survey of 52 stores in June found that most were hiring only temps, who must re-apply for their jobs after 180 days. Meanwhile, existing long-time employees have seen their hours reduced drastically.
Walmart, as the nation’s largest private employer, exerts a powerful influence on other large companies. As Walmart slashed employees’ hours, jobs report after jobs report showed the biggest gains in a part-time, low-wage workforce.
Not only is the Walmart model bad for workers and business, it’s also terrible for the taxpayer. The company’s refusal to pay a living wage and benefits forces most of its employees onto public benefits like food stamps and Medicaid. Each store’s workforce consumes as much as $1.75 million in public benefits each year.
Walmart defends its poor labor practices as necessary to keep prices down. But as Walmart’s sales dropped with its payrolls, other retailers have proven that treating workers well is not mutually exclusive to a good deal. Walmart’s competitor, Costco, offers its employees an average wage of $21.96 an hour, about 40 percent more than Walmart employees make. Costco enjoyed a 19 percent increase in profits last quarter as Walmart sank, generating much more revenue and profit per worker. WinCo, a smaller grocery chain based in Idaho, boasts full health benefits for anyone working over 24 hours a week and retirement accounts for more than 400 workers — while maintaining prices even lower than Walmart’s.