Just a week after cutting its quarterly and yearly outlook, Walmart (NYSE:WMT) stock is falling after the big box store confirmed laying off hundreds of corporate roles. WMT stock is down more than 2% today as investors respond to yet another strong recessionary signal.
What’s going on with Walmart lately?
On Wednesday afternoon, a Walmart spokesperson validated a Wall Street Journal report on the company’s layoffs. As part of a restructuring effort in response to slipping consumer spending, Walmart began informing corporate employees about layoffs. About 200 jobs are set to be cut in “departments including merchandising, global technology and real-estate teams.”
The company did report it was reallocating some investments and creating new roles as part of the restructuring. Walmart employs more than 1.7 million people in the United States, making it the country’s largest employer.
This news comes as a stark warning that U.S. spending is beginning to recede. Last week, Walmart lowered its second-quarter and fiscal 2022 profit outlook due to slowed spending at its stores. The company cited necessary price cuts due to overstocked merchandise in its retail locations as the justification behind the new guidance.
Walmart joins the likes of other major retailers like Target (NYSE:TGT), which also recently warned of waning profits this year due to slowed spending.
WMT Stock Slips as List of Layoffs Grows
The past few weeks have been wrought with layoff news. Ford (NYSE:F), Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META) have all recently announced cutting employees and/or slowing hiring. Even despite relatively strong U.S. jobs reports — including 372,000 jobs added in June — many companies are starting to feel the pinch of inflation and recession fears. Consumers are clearly cutting back spending, especially in discretionary categories off which Walmart has historically thrived.
It hasn’t been an equitable drop in sales, however. E-commerce giant Amazon (NASDAQ:AMZN) actually managed to beat sales estimates in its Q2 earnings call.
Walmart actually represents a more mild case of a cold stock market this year. WMT stock is down about 12% this year. Meanwhile, the Nasdaq Composite is eyeing losses of over 20% and the S&P 500 is sinking close to 13%.
Whether today’s layoff news is the beginning of further job cuts across the retail industry remains to be seen.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
