Walmart to cut or relocate 1,000 corporate workers: is AI to blame again?

Walmart is cutting or relocating around 1,000 corporate employees as the retail giant consolidates parts of its global technology and artificial intelligence operations in a broader push to streamline decision-making and accelerate its digital transformation.

The move, first reported by The Wall Street Journal on Tuesday, comes as Walmart increases investments in artificial intelligence, automation and technology infrastructure to compete more aggressively with rivals including Amazon, Costco and Aldi.

The restructuring follows the appointment of Daniel Danker, a former Instacart executive, who joined Walmart last summer as head of global AI acceleration.

Walmart’s latest restructuring is tied to organizational alignment rather than replacing workers with artificial intelligence, a company spokeswoman told the Journal.

Leadership reviews internal structure

According to the report, Danker and Walmart’s global technology chief Suresh Kumar reviewed the company’s internal structures and concluded that several teams performing overlapping functions should be combined to improve efficiency.

"In some cases, we've had different teams working on similar problems," the executives said in a memo to employees viewed by The Wall Street Journal.

The memo added that affected employees would be able to apply for open positions within the company.

Many impacted workers have reportedly been asked to relocate to Walmart’s headquarters in Bentonville, Arkansas, or to offices in Northern California as the retailer continues consolidating operations around key corporate hubs.

Walmart, the largest private employer in the United States, employs roughly 1.6 million people domestically, most of them hourly workers.

AI push gathers pace

Under Chief Executive John Furner, Walmart has accelerated efforts to modernize its operations through artificial intelligence and digital tools as it seeks to narrow the technology gap with Amazon.

The company has invested heavily in AI-powered systems across its retail operations, supply chain and advertising businesses.

Walmart is also expanding higher-margin businesses beyond traditional merchandise sales while attempting to maintain profit growth.

Amazon has gained an early advantage in generative AI shopping tools through Rufus, its AI-powered shopping assistant designed to answer consumer queries and recommend products.

Broader corporate restructuring continues

The retailer has repeatedly reduced corporate staffing levels in recent years while centralizing teams and simplifying operations.

Earlier this year, Walmart filed notices tied to around 100 layoffs at its Hoboken, New Jersey offices.

Last year, the company eliminated about 1,500 corporate roles in the United States as part of a wider effort to reduce costs and speed up internal decision-making.

In recent months, Walmart has also combined technology platforms across several business units, including Sam’s Club, its international operations and its core retail business.

"We believe this will result in our growth continuing to come at a much lower marginal cost than what it has historically," Furner said during the company’s earnings presentation earlier this year.