Walmart lays off 1,500 people at Atlanta-area fulfillment center

Diving brief:

  • Walmart by Dec. 2 will lay off 1,458 employees at a plant in Fulton County, Georgia, outside of Atlanta, according to a filing with the state Department of Labor.
  • Rival Amazon has also slashed its capacity to run after embarking on a massive expansion amid surging online demand at the height of the pandemic, canceling or delaying dozens of warehouses.
  • Walmart did not immediately return a request for additional information and comment.

Overview of the dive:

Walmart has opened this facility to large fanfare in 2015, and the retail giant’s online sales have been steadily increasing since then. Walmart.com revenue last year increased by 11% compared to 2020.

The company’s extensive network of stores plays an important role in its logistics, and this has recently been bolstered by the acquisition of online grocery store automation business Alert Innovation, which produces bespoke inventory management technology. This follows other similar efforts: in May, Walmart signed an agreement to deploy Symbotic’s end-to-end automation system across all of its 42 regional distribution centers after taking an 11.1% stake in the AI ​​company.

But the meteoric rise of pandemic-related e-commerce has leveled off since vaccines became widely available and consumers resumed shopping in stores. It’s unclear whether the downsizing of the Fulton Country facility is a sign that Walmart is rethinking its online ambitions, although some analysts believe it should.

In a statement to Reuters, a Walmart spokesperson said the company was converting the center to support its Walmart Fulfillment Services business, which supports its market vendors. A Walmart spokesperson did not immediately return a request for comment on why it would necessitate a shutdown or layoffs.

Amazon’s rival has leveraged ancillary businesses like Market Execution Services to create lucrative revenue streams outside of its direct retail operations, having ceded much of its online retail business years ago to its third-party marketplace . Although Walmart appears to be following suit, it is unlikely to succeed with such tactics, according to Nick Egelanian, president of real estate firm Siteworks.

“I never see them capitalizing on it or leveraging it to get into other more profitable businesses.” he said on the phone. “I think they’re losing market share in all of their businesses as e-commerce depletes resources.”

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