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Exclusive-Walmart laying off hundreds of US workers at five e-commerce fulfillment centers

FILE PHOTO: Walmart store in Encinitas, California

By Siddharth Cavale

NEW YORK (Reuters) -Hundreds of workers at five U.S. Walmart facilities that fulfill e-commerce orders are being asked to find jobs within 90 days at other company locations, a spokesperson confirmed to Reuters.

About 200 workers at Pedricktown, New Jersey, and hundreds of others at Fort Worth, Texas; Chino, California; Davenport, Florida; and Bethlehem, Pennsylvania were let go due to a reduction or elimination in evening and weekend shifts, the spokesperson said.

The layoffs at Walmart, a retail bellwether because of its size, could be a harbinger of further turmoil in the U.S. economy, which many economists predict could enter recession this year.

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Fears of an upcoming recession have already led retailers to announce 17,456 job cuts so far in 2023, compared with 761 in the same period last year, according to a March report by Challenger, Gray and Christmas.

Amazon, Neiman Marcus, and Lidl are among retailers cutting jobs, largely corporate staff.

"We recently adjusted staffing levels to better prepare for the future needs of customers," Walmart said in a statement, adding that it would work closely with affected associates to find jobs at other locations.

The spokesperson said impacted workers would be paid for 90 days to find jobs at other facilities, including those in Joliet, Illinois, and Lancaster, Texas, where the company has opened up new high-tech e-commerce distribution centers.

Walmart has been investing heavily in automation over the past few years, partnering with companies such as Knapp to help it cut down the number of steps it takes employees to process e-commerce orders to five from 12, which has been implemented at its Pedricktown, New Jersey location, for instance.

On a post-earnings call in February, Walmart CEO Doug McMillon said he was "most excited about the automation opportunity we have" with plans to increase investments in automation technology as part of its more than $15-billion capital expenditure budget this year.

The CEO's comments followed a cautious full-year forecast from the retailer, which CFO John David Rainey said was down to a lot of "trepidation and uncertainty with the economic outlook."

Workers being laid off at the five fulfillment centers will be eligible for roles at Walmart's 5,000 U.S. stores, which the company has increasingly been using as a platform to ship orders to customers' doorsteps, the spokesperson said. Walmart is the largest private employer in the United States with about 1.7 million U.S. workers.

Apart from Pedricktown, New Jersey, Walmart did not post a Worker Adjustment and Retraining Notification (WARN) notice for the layoffs, according to a Reuters review of labor government data. A WARN notice is mandated by U.S. labor law and requires companies with 100 or more employees to provide 60 days' advance notification of plant closings and mass layoffs.

The spokesperson declined to call them mass layoffs and said that the warehouses continued to operate normally. The company did not issue a WARN notification for the other locations as it is unsure about the total number of employees that will be eventually laid off and re-hired, the spokesperson added.

(Reporting by Siddharth Cavale in New YorkEditing by Nick Zieminski)