That growth has leveled off: In the second quarter of 2022, Walmart's e-commerce sales grew by just 12% year-over-year. Walmart's e-commerce sales boomed during the height of the pandemic, hitting 97% year-over-year for the second quarter of 2020. Walmart may have laid off workers because of a slowdown in e-commerce growth, Yarbrough said. "You're always investing constantly because Amazon's always investing and taking the game to another level." "When you're competing with Amazon, you can never stop," Yarbrough said. He said Walmart will likely continue investing in automation, particularly to compete with Amazon, which has devoted billions to automating its warehouses. Yarbrough said Walmart may convert more fulfillment centers to focus on WFS as the company attracts more third-party sellers to its marketplace. One day after filing the WARN notice last week, the company announced plans to acquire Alert Innovation, a market leader in e-grocery fulfillment automation that has worked with Walmart on its market-fulfillment centers. In the blog post announcing the layoffs, Sprague praised the first facility, launched in Joliet, Illinois, for its "unique combination of people, robotics, and machine learning." Three more are on the way, and Walmart executives said the four next-gen fulfillment centers will be able to provide two- or same-day delivery to 75% of the US. This past summer, the company announced plans to build four " next-generation" fulfillment centers, which are focused on automation and speed.
He said with Walmart's e-commerce business losing money, automation offers a path to profitability. "Walmart has been talking about automation for a while now," Brian Yarbrough, an analyst at Edward Jones, told Insider. One Walmart analyst thinks Walmart converting the Atlanta facility into Walmart Fulfillment Services could be a result of the megaretailer's push for more automation in its warehouses. Automation and the e-commerce slowdown may also be at play Karisa Sprague, Walmart's senior vice president for fulfillment operations, wrote in the blog post that this "strategic move" will include equipment and infrastructure improvements, and the goal is to fully convert the Atlanta facility this fall.Ī Walmart spokesperson told Insider that the facility will employ "several hundred" employees and that those not hired back will be able to do a 90-day paid job search and apply to work at other Walmart locations. For comparison, Amazon said it has nearly 2 million third-party sellers on its marketplace. Have an account? Log in.Ī Walmart blog post published on Monday said the company will turn the fulfillment center into "a dedicated facility supporting our growing Walmart Fulfillment Services (WFS) business." The company launched Walmart Fulfillment Services in 2020 to allow third-party-marketplace sellers to ship and store products using the retailer's warehouses.Ĭlose to 200,000 third-party sellers currently list products on Walmart Marketplace - about twice as many compared to the summer of 2021, according to estimates from Marketplace Pulse, an e-commerce analytics firm. This story is available exclusively to InsiderĪnd start reading now. Account icon An icon in the shape of a person's head and shoulders.
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