Wal-Mart Stores Inc., in the midst of spending $1 billion to raise employees? wages and give them extra training, has been cutting the number of hours some of them work in a bid to keep costs in check.
Regional executives told store managers at the retailer?s annual holiday planning meeting this month to rein in expenses by cutting worker hours they?ve added beyond those allocated to them based on sales projections.
The request has resulted in some stores trimming hours from their schedules, asking employees to leave shifts early or telling them to take longer lunches, according to more than three dozen employees from around the U.S. The reductions started in the past several weeks, even as many stores enter the busy back-to-school shopping period.
Chief Executive Officer Doug McMillon is trying to balance a desire to improve service — partly through increased spending on his workforce — against investors? pressure to keep profit growing. Labor costs, which rose after Wal-Mart increased its minimum wage to $9 an hour in April, have weighed on earnings, which missed analysts? expectations last quarter. At the same time, Wal-Mart is trying to maintain low prices to fend off rivals.
The reduction in hours is taking place only in locations where managers have overscheduled workers, staffing the store for more time than they?ve been alloted, said Kory Lundberg, a spokesman for Bentonville, Arkansas-based Wal-Mart. The reductions won?t affect efforts to better staff stores, shorten checkout lines, and improve cleanliness and stocking, he said.
Dual Goals
Greg Foran, the head of Wal-Mart?s U.S. operations, has said the retailer has dual goals of containing expenses and spending more to improve its stores.
?Amid the investment, we?re focused on growing sales and controlling costs, as you would expect from Wal-Mart,? Foran said earlier this month after the company announced disappointing earnings. ?We are staying true to our roots. However, we are committed to improving the customer experience and we will protect the investments necessary to achieve this goal.?
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