Walmart has announced the closure of 10% of its Sam's Club wholesale stores, resulting in thousands of job losses. The closures were revealed on the same day the retailer said it would raise its minimum wage for US staff to $11 an hour and provide some workers with a one-off cash bonus.
The pay rise, effective from next month, was attributed to the US tax overhaul that cut the corporate tax rate from 35% to 21%. Hourly employees will receive between $11 and $24.70 an hour, with full-time average pay rising from $13.85 to $14.50. Some workers will also receive bonuses of up to $1,000 based on length of service, costing the company $400m.
US Treasury Secretary Steven Mnuchin praised the pay deal as evidence that the tax bill is returning money to workers. However, he dismissed questions about the layoffs, saying: 'Lots of things are going on in the economy.' Senate Democrats criticised the closures, arguing that lower corporate taxes primarily benefit wealthy shareholders while leaving thousands jobless.
Sam's Club, a membership-only retailer similar to UK cash-and-carry stores, said it would close a series of clubs to align with its strategy. Twelve of the affected stores will be converted into eCommerce fulfilment centres. The closures follow a recent focus on boosting profitability and targeting families with incomes between $75,000 and $125,000.
Each store typically employs over 150 people. In Illinois alone, seven closures will affect more than 1,000 workers. Walmart CEO Doug McMillon said the company is still assessing the full impact of the corporate tax cut. The move follows similar announcements from other US firms, including Wells Fargo and AT&T, which have also pledged wage rises or bonuses following the tax reforms.
