Friday, January 12, 2018

Walmart ripped as it boosts wages—but shutters 63 Sam’s Club stores

What started out as an announcement by Walmart to garner positive coverage and PR instead drew scathing backlash.

NPR reported:

Walmart is raising wages for new employees from $10 an hour to $11, expanding paid parental leave and offering a one-time bonus to eligible workers, actions that the company says will affect more than 1 million employees in the U.S.

On Thursday, Walmart tweeted the news:

However, the goodwill garnered by the announcement was dampened hours later, when reports circulated that Sam’s Club was shuttering stores nationwide—63 in all.

Business Insider reported:

Sam's Club has not said how many employees are losing their jobs. Each Sam's Club warehouse employs about 175 people, meaning more than 11,000 people could be impacted.

In some cases, employees were not told their store had closed before showing up to work on Thursday. Those employees learned their store would be closing when they found the store's doors locked and a notice announcing the closing, Sam's Club workers told Business Insider. At some stores, employees were turned away by police officers.

The company’s chief executive, John Furner, sent a letter to employees. It read, in part:

Transforming our business means managing our real estate portfolio — we need a strong fleet of clubs that are fit for the future. After a thorough review, it became clear we had built clubs in some locations that impacted other clubs, and where population had not grown as anticipated. We've decided to right-size our fleet and better align our locations with our strategy. We will be closing some clubs, and we notified them today. We'll convert some of them into eCommerce fulfillment centers — to better serve the growing number of members shopping with us online and continue scaling the SamsClub.com business. The first of these conversions will be in Memphis, Tennessee.

We know these decisions impact people we care about deeply — our associates and their families, as well as our members and their neighbors — and we did not make them lightly. A Sam's Club is a place of community and memories, and we are so appreciative of our associates who have worked hard over the years to serve our members. Our immediate focus will be on helping those impacted by today's news. We will work to place as many associates as possible in new roles at nearby locations, and we'll provide them with support, resources, and severance pay to those eligible. Many of our associates and members will move to nearby clubs. If you work in such a club, please make them feel welcome.

… Change is never easy, but we're making these decisions from a position of strength. As you've seen in our recent quarterly results, our traffic and comps have improved, and that's because of the work you do to serve our members. We have momentum, and now is the time to accelerate our transformation efforts. Thank you.

[FREE DOWNLOAD: 13 tips for preparing for a crisis]

Though Furner’s letter said the company “did not make [the decisions to close stores] lightly,” it did make them abruptly. Many reporters tweeted scenes of Sam’s Club stores with “closed” signs on its doors and employees who were given little or no notice of store closings.

The Washington Post’s Christopher Ingraham tweeted that the Sam’s Club closings will make up roughly half of the amount Walmart is spending on increased wages and bonuses:

Podcaster Nick Jack Pappas tweeted that only those employees who have worked for Walmart for more than two decades will receive bonuses:

As more details surfaced, many Twitter users lashed out at Walmart and Sam’s Club:

The social media team for Sam’s Club has been responding to concerned and angry customers on Twitter with tweets such as the following:

How would you advise Walmart and Sam’s Club to handle this crisis moving forward, PR Daily readers?

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