Walmart said the pay increases apply to all its hourly workers in the United States, including those at its Sam's Club stores. In a tweet, the company said the closures would help "better align" its physical locations with its strategy.
The announcement came on the same day that Walmart said it is boosting its starting salary for US workers and handing out bonuses. Yet its Sam's Club division only operates two fulfillment centers for its national online sales.
Sam's Club says their customers will be refunded their 45 dollar annual membership fee. The official Sam's Club Twitter account replied to some questions with a brief statement. "We need to put our investment into supporting our online growth and closing these Clubs will allow us to do that".
Sam's Club posted one such alert, referred to as a WARN notice, to the IN state government's website. All three are slated for closure. Employees appear to have been given no advance warning, and confusion reigned for most of the day.
Up to 10 closing Sam's Club stores that once attracted shoppers with their no-frills warehouse settings where shoppers could walk among hi-los and skids of merchandise soon will shift their objective to supporting online sales.
Betancourt and other employees at the New Caney store who were willing to discuss the layoffs with the Observer say they were shocked the store was being closed.
Thirty-nine stores called by CNNMoney had recorded messages saying the store was closed Thursday but would reopen Friday. Four Sam's Club outlets in New York, Texas and California will also close.
The company also responded on Twitter to members curious about what would happen to their memberships, advising them to continue to visit the remaining Sam's Clubs while also providing a membership cancellation link.
"I would've been astounded if they hadn't raised wages", said Thomas Kochan, a professor at MIT's Sloan School of Management. "They are increasing salaries to over a million American workers". I think we all know how this typically plays out.
The company noted that new tax laws will create financial benefit for the company and will allow the company to offer incentives to its employees.
The one-time bonus represents a $400 million expense, the company said.
To be fair, Sam's Club CEO John Furner said the company plans to place as many employees as possible in new roles at nearby locations. Matt Gardner, a senior fellow at the Institute on Taxation and Economic Policy, told the New York Times that based on Walmart's earnings over the past five years, the corporate tax cut would save the company an estimated $2.2 billion annually. Lots of things are going on in the economy, and we appreciate what Walmart is doing.
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