Walmart Leverages Automation And AI To Cut Costs And Grow, Paving The Way For Other Retailers: Report

Walmart Inc. WMT is the largest private-sector employer in the United States. As of 2024, the company had 2.2 million staff globally, down by 70,000 from five years earlier. According to its annual reports, the retail giant’s revenue has grown by over $157 billion in the last five years.

If we compare several retailers’ latest quarter revenue, Walmart reported $166 billion, compared to Costco Wholesale’s COST $63.2 billion, Target Corp’s TGT $24 billion and Home Depot’s HD $40 billion.

Costco, Target and Home Depot each added tens of thousands of employees in the last five years.

Also Read: Walmart Doubles Down On Discounts To Keep Prices Low As Tariffs Threaten Shoppers’ Budgets

Amazon.Com Inc AMZN nearly doubled its global workforce to 1.6 million.

Walmart aims to grow sales by 4% annually without increasing its headcount, marking a contrast in the hiring dynamics of U.S. retail trade, which employed one in 10 American workers, the Financial Times reported on Tuesday. Walmart’s U.S. workforce has remained at 1.6 million in the last ten years.

Wall Street analysts Neil Saunders of GlobalData and Steven Shemesh of RBC Capital highlighted to the Financial Times that Walmart’s expansion without job creation reflects the prioritization of e-commerce and automation of cumbersome tasks. Artificial intelligence will offer an additional boost to these initiatives. Paul Lewellen, senior vice president of operations at Walmart, said automation upstream has allowed the company to free up five full-time associates to work in other store areas.

Walmart CEO Doug McMillon and other executives snubbed the hiring concerns, citing that technology investments will lead to new roles for workers.

Meanwhile, critics argue that Walmart’s net sales in the U.S. have risen 36% in the past five years, while average U.S. hourly wages have increased by 28% to $18.25. Walmart stock surged over 146% in the last five years and 52% in the previous 12 months.

In April, Walmart showcased labor-saving technologies at two new warehouses outside Dallas, including a cold-storage hub for foods and a fulfillment center to enable speedy deliveries for e-commerce customers.

About 600 associates work inside the 730,000 sq ft refrigerated warehouse, implying one employee for every 1,200 sq ft. A multi-tiered geometry of lifts, conveyors and sorting machines handles perishables from suppliers and stores them in racks. Algorithms-guided robots later dispatch the foods to coolers at 175 regional stores. The centers can ship over twice the volume of traditional cold warehouses while cutting costs by 20%.

Two miles away, Walmart’s DFW-5 fulfillment center stocks items for a U.S. e-commerce business that grew by 21% in the latest quarter. The 1.5 million sq ft warehouse can hold up to two million individual products and employs 650 associates. Here, work that once took 12 steps has been reduced to five, helping to cut the cost by an expected 30% at the end of 2025.

DFW-5 replaced a Fort Worth, Texas, warehouse named DFW-1, where Walmart cut over 1,000 jobs.

According to annual reports, Walmart U.S.’s dedicated e-commerce fulfillment centers declined to 29, down from 40 in 2020.

In May, Walmart cut 1,500 global tech, U.S. operations and U.S. advertising staff.

WMT Price Action: Walmart stock was down 0.32% at $99.45 premarket at last check on Tuesday.

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