Just one week after Walmart (NYSE:WMT) lowered its quarterly and full-year guidance, the business will reduce its workforce. Hundreds of corporate personnel in areas relating to retail, global technology, and real estate are being laid off. Walmart (NYSE: WMT) let go of approximately 200 corporate employees on Wednesday amid the economic downturn and rising inflation, according to a person familiar with the incident. Walmart (NYSE:WMT) portrayed the move as an effort to reorganize as it marked down clothing and other things that had accumulated in its stores.

Other retailers have also been taken by surprise as consumers have changed spending away from higher-margin items that were in great demand during the outbreak. As a result of the current inflationary climate, consumers are increasingly interested in purchasing necessities such as food and hygiene. Target and Best Buy have also lately lowered their forecasts as they seek to rebalance their inventories for the remainder of the year, which might result in additional markdowns and reduced profitability.

Neil Saunders, the retail analyst at GlobalData, remarked, that this does not convey a positive signal. This could further undermine consumer confidence and the economy.

Are There Cracks in the Job Market?

As is the case with many modern economic indicators, the data is split in a variety of ways. Companies are slowing the rate of new employees and sometimes freezing or eliminating positions while recruiting continues in expanding fields (the latest jobs report is out tomorrow). In the case of Walmart (NYSE:WMT), the retailer stated that the restructuring will create new positions in e-commerce, health and wellness, supply chain services, and advertising sales, despite the company’s corporate downsizing.

While the company has stated that it will create new positions in e-commerce and technology, it has not specified how many positions will be created. Other retail giants, such as Target and Best Buy, have reduced their profit goals in recent months due to the growing inflation. Amazon (NASDAQ:AMZN) said in its earnings report for June that it has reduced its global workforce by roughly 100,000 employees, or approximately 6%.

The news of Walmart’s layoffs arrives just before the release of the government’s July employment report. Analysts anticipate that the report will reveal the addition of 250,000 nonfarm payroll employment in July, which is less than the 372,000 positions that were added in June.

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