Sam's Club is eliminating about 700 back-office positions at its U.S. clubs as the company continues to explore ways to control costs and improve efficiency in its operations.
A spokesman for the retail-warehouse division of Wal-Mart Stores Inc. confirmed the changes Friday, saying club-level accounting employees will be affected by the decision as the retailer automates the work. Money-counting cash recycler machines will now perform those duties.
The company made a similar move last September, eliminating about 7,000 back-office jobs across its U.S. Wal-Mart stores as it expanded a pilot program aimed at improving efficiency.
Those eliminated jobs covered accounting roles as well as invoicing positions as the retailer decided to automate and centralize those operations. The company said at the time there were typically two or three employees in those back-room roles at each of its 4,600 stores. Wal-Mart said many of those workers would have opportunities to move into customer-facing positions.
The Sam's Club employees affected by the change will have opportunities to remain with the retailer in other positions as well, according to spokesman Tara Raddohl. Sam's Club has about 100,000 employees across its U.S. clubs and many of those accounting roles were among the highest-paying at the club level.
Raddohl said Sam's Club Chief Executive Officer John Furner remains focused on simplifying the business and putting as many resources as possible into efforts that best serve customers.
"We want as many associates as possible to be able to stay with the company," Raddohl said in an email. "We are already working to help them find other roles within their club or find employment opportunities at other Sam's Club locations or Wal-Mart stores. We are providing 60 days paid notice to each associate impacted. Additionally we are providing severance pay and benefits for eligible associates."
Retail analysts said it's no surprise to see Sam's Club make the decision to automate the work after Wal-Mart made a similar move last year. Neil Stern, a senior partner with Chicago-based McMillan Doolittle, said automation continues to reshape multiple industries, including retail.
"It is clear that retailers will be looking for efficiency and productivity as they continue to face wage pressures," Stern said. "Jobs will get replaced with automation to drive better labor utilization. This is not always about cost containment, but what is the best way to get a job done. We are going to see more of this across all industries. Retail is no exception."
A study by New York-based Cornerstone Capital Group earlier this year concluded that between 6 million and 7.5 million of the current 16 million retail industry jobs are vulnerable to automation.
Annibal Sodero, an assistant professor at the Sam M. Walton College of Business at the University of Arkansas, Fayetteville, said the impact of automation is a topic he often discusses with students.
His warning to them is clear: Specialization is needed because "repetitive tasks" will continue to go away.
"This is accounting, but it's not the first time we've seen this," Sodero said about the Sam's Club positions replaced with automation. "This is not the end. ... Unfortunately, it's the reality."
Business on 09/23/2017