Boom times for ecommerce fulfillment centers are ending, as the pandemic-driven surge in cargo slows.
Walmart Inc.’s job cuts at five U.S. ecommerce fulfillment centers will affect more than 2,000 positions, according to regulatory filings, though impacted employees may find other roles at the company.
The losses include more than 1,000 positions at a warehouse in Fort Worth, Texas, the state’s workforce commission said April 3. The retail giant is also anticipating a reduction of almost 600 jobs at a Pennsylvania fulfillment center, 400 in Florida and about 200 in New Jersey. It plans for more reductions in California.
The regulatory filings add precision to the staffing cuts at the Walmart warehouses, which the company confirmed in March without quantifying. Walmart is also growing in some areas as it adjusts its stores and fulfillment centers to handle more online orders, a spokesman said in an email. That may enable the retailer to reshuffle some workers to other jobs rather than cut them.
As a result, the net impact on total employment at Walmart, the largest private-sector employer in the U.S., remains uncertain. The company has avoided the kind of mass layoffs underway at rival Amazon.com Inc., which said in March it would eliminate another 9,000 jobs in addition to 18,000 recent cuts.
Amazon is No. 1 in the Digital Commerce 360 Top 1000 database. Walmart is America’s largest overall retailer and is No. 2 in the Digital Commerce 360 Top 1000.
California’s fulfillment warehouses show signs of slowdown
All across Southern California’s Inland Empire, the warehousing mecca that hosts Amazon and Walmart facilities, there are signs of trouble.
Just last year, the region was hiring workers faster than California and the rest of the U.S. It emerged as a top beneficiary from the supply-chain turmoil that clogged warehouses and led to record imports through North America’s largest port complex near Los Angeles.
Now, the gush of cargo that once flowed through the 27,000-square-mile area, stretching from east Los Angeles to the Nevada and Arizona borders, has dwindled to almost three-year lows and jobs are harder to come by.
It’s an ominous sign for California, already reeling from the tech collapse and a banking crisis. And it’s a glimpse into what may lie ahead for the rest of the U.S. as it stares down a potential recession.
California is the world’s fifth-largest economy. It projects a mild recession is possible, giving way to concerns that the pain would hit the Inland Empire’s blue-collar workforce especially hard.
“When the party ends, then you know the drop will be even faster,” said Johannes Moenius, an economist at the local University of Redlands. “The more warehouses we have today or tomorrow, the steeper the fall.”
Supply chain data
Data released April 4 showed U.S. supply-chain activity fell to the lowest in at least 6.5 years in March, with low transport prices for goods driving the decline in the Logistics Managers’ Index.
The Inland Empire, an epicenter of California’s 2008 housing crisis, occupies a strategic location just east of the twin hubs of Los Angeles and Long Beach. It collectively handles about $500 billion in goods annually.
With a population of almost 5 million, it delivered a remarkable increase in transportation and warehousing jobs during the pandemic, peaking at 215,000 last year and marking a 40% surge from February 2020.
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