Posted on 07/31/2015 7:42:02 AM PDT by SeekAndFind
"Please remember, these people are our neighbors and friends. You have a skill that will be very much in need when this goes down. You are experts in the job market and you know what it takes to get hired. This is a time for us to step up and do what we can to help."
The quote above is from an internal memo sent to employees of Northwest Arkansas recruiting firm Cameron Smith & Associates and references an expected wave of layoffs at WalMart’s home office in Bentonville.
The memo was obtained by the Arkansas Democrat-Gazette, who spoke with Cameron Smith himself via e-mail.
"The last time Walmart had a large layoff (800 plus), we were unprepared and overwhelmed with phone calls, emails, resumes and walk-ins," Smith told the paper, referring to a series of cuts at WalMart in 2009. The next round of layoffs are just around the corner and could affect as many as 1,000 employees Smith contends, citing conversations with company insiders.
As those who follow the retailer closely are no doubt aware, context is key here.
Back in April, we asked why WalMart was mysteriously shuttering geographically distinct stores nationwide for "plumbing problems." The company, citing the need to repair persistent "clogs and leaks", closed five stores across the country almost simultaneously. The 2,500 affected employees were in some instances given almost no notice whatsoever.
After a few enterprising reporters determined that no plumbing permits had been filed in any of the locales where the shuttered stores were located, conspiracy theories sprung up, the most outlandish of which posited a link between the store closings and the Jade Helm 15 military drills which began earlier this month in Texas and six other states.
For our part, we argued that the store closures were more likely the result of two things: i) the need to cut costs, and ii) the desire to close a "problem" store in California that had for years served as a hotbed for union activism. For now, we won’t dive into the union issue, but for those interested, see here, here, and her.
As for cost cutting, consider the following, excerpted from "Why Is WalMart Mysteriously Shuttering Stores Nationwide For Plumbing Issues?":
Earlier this year, WalMart became one of several corporate heavyweights to lift wages for its meagerly compensated workers, around 500,000 of which are now set to receive at least $9/hour and $10/hour by Q1 2016 (that of course assumes they make it on $9 an hour for another 12 months and don’t seek out other employment by sheer necessity).
Meanwhile, the move by the country’s largest retailer to pay a few extra pennies to its (basically) minimum wage employees comes at a cost to the company’s suppliers because when you operate on the thinnest of margins in order to be the "low price leader," someone has to pay for those wage hikes and you can’t pass along the costs to customers because many of your low-income patrons are operating from the same tax bracket as your low-paid employees. As such, the supply chain is forced to lower their prices and of course they’re going to comply because well, you’re WalMart meaning you’re your vendors’ biggest account pretty much by default. The outcome is that "while WMT (or MCD or GAP or Target) boosts the living standards of its employees by the smallest of fractions, it cripples the cost and wage structure of the entire ecosystem of vendors that feed into it, and what takes place is a veritable avalanche effect where a few cent increase for the lowest paid megacorp employees results in a tidal wave of layoffs for said megacorp's vendors."
If that doesn’t turn out to be enough in the face of an economy which isn’t really recovering and in which low-income shoppers are constrained by lackluster (and by that we mean nonexistent) wage growth, some sacrifices may have to be made.
The first such sacrifice (apparently) were the 2,500 or so employees at the five locations with intractable plumbing problems, but clearly that was not enough which is why now, the company is moving to cut 1,000 higher paying jobs in Bentonville.
Of course WalMart can’t come out and say that a lackluster economy and nonexistent wage growth for 83% of the nation’s workforce has ironically served to make the company’s own minimum wage hikes untenable and therefore some heads in middle management have to roll, so instead the cuts will be blamed on bureaucratic inefficiencies. Here’s the Democrat-Gazette again:
Cutting through red tape and trimming bureaucracy has been among the goals of McMillon, who took over as CEO in February 2014. Wal-Mart employs more than 2 million worldwide and has more than 1.4 million employees in the U.S.
McMillon mentioned the size of the company's headquarters as a possible detriment to quicker action at the store level and told retail analysts during a June question-and-answer session that employees should remember "there are no cash registers in the office." During a store visit last year, McMillon said he encountered an electronics department manager who spent five hours on the phone with the home office to get assistance with a problem.
"We want people to make decisions and move with speed and not have the organization run in a way that causes it to slow down," McMillon said.
He again referred to the "dangers of a big company" during a June 11 retail conference in Springdale.
"As we've grown and time has gone on, we've created pockets of our business, situations where people don't want to share bad news. Lots of PowerPoints get built, lots of pre-meetings are held to socialize things so people aren't surprised during a meeting," McMillon said. "That is bureaucracy. That slows us down."
Got it. Too many people are working on PowerPoints and when someone making $10 an hour calls the home office, the hold time is too long. These are clear signs of an elephantine, Washington-esque bureaucracy, which must be done away with.
Or something.
Just don’t dare suggest that the cuts are the indirect or even direct result of the wage hikes that will cost the retailer around $1 billion this year, because that would mean that critics of the push to hike the pay floor are correct to assert that forcing employers to pay more will immediately result in equal and offsetting layoffs.
Only here they aren't necessarily "equal" at all.
That's in no way a commentary on the "worth" (in a philosophical sense of the word) of an hourly worker versus a salaried employee, but if layoffs in Arkansas do materialize as Cameron Smith predicts, it seems entirely fair to suggest that the pittance given to hundreds of thousands of low paid workers will ultimately come at the cost of 1,000 or so breadwinner positions. We'll leave it to readers to determine whether that is a net win for the economy.
On the bright side for anyone affected by the coming round of job cuts, at least you know that this time around, the staff at Cameron Smith & Associates is "much more prepared" to handle the sudden influx of 1,000 distraught former WalMart employees.
Simple: they won’t need Walmartians at those locations, when the buildings become resettlement camps....
These are cuts at the home office. I doubt any of them are making minimum wage, or even the $10 an hour.
When the price of anything is more than its worth to the buyer,
less will be bought.
“plumbing problems”...
in 10+ various and diverse geographic locations.
They were leaking money...
Those were loooooooong pipes...
Sounds pretty typical of most corporations. Director-level people need some managers to boss around, manager-level people need doers and gofers, and VPs need a lot of all of the above to justify their phoney-baloney jobs.
Decimation is a good practice, usually triggers by a re-org. After a few months no one will even miss those who aren’t there.
It doesn’t matter if you are doing any good.
The only thing that matters is if people think you’re trying to do good.
I give you the Democrat voters.
Four years of abject failure by Obama, and they vote for him again.
Bentonville, Arkansas. Population 40,187.
Good luck with that.
Work smarter, not harder.
Productivity is the name of the game. Any employee of another, must be earning back all the costs involved with having a warm body filling the position to solve a problem created by a previous bottleneck in operations, plus a reasonable rate of return to the employer. If the return to the employer is sufficiently valuable, and is earning a serious profit, then the logical thing to do is reward the employee with more suitable compensation. This builds loyalty and serves as the most equitable means ever devised to “share the wealth”.
As long as the employee never reaches the limit known as “Peter’s Principle”, at which point they shall have been promoted to the level at which they can no longer serve with competence.
The hierarchy must be preserved.
Staff memo: Walmart employees, good news! We are increasing the wages of our most productive workers. We appreciate your service and want to reward you appropriately.
But we need you to remain productive, as we will be reducing staff levels to cover your increase in wages.
You want a raise then 1000 of you have to go.
Wages tend towards subsistence levels over time.
Under socialist systems wages drops below subsistence levels.
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