Hundreds of workers at five U.S. Walmart facilities that process online orders have been given 90 days to find a job at other company locations, a spokesperson confirmed to Reuters.
About 200 workers at Pedricktown, New Jersey, and hundreds of others at Fort Worth, Texas; Chino, California; Davenport, Florida; and Bethlehem, Pennsylvania, were let go due to a reduction or elimination in evening and weekend shifts, the spokesperson said.
“We recently adjusted staffing levels to better prepare for the future needs of customers,” Walmart said in a statement.
The affected workers will continue to be paid for 90 days while they find jobs at the company’s new high-tech “e-commerce fulfillment centers,” such as those in Joliet, Illinois, and Lancaster, Texas.
Automation has been the main focus of Walmart’s investments over the past few years. The retail bellwether partnered with automation companies such as Knapp to more than halve the number of steps that it takes workers to process online orders in its warehouses.
In October last year, Walmart announced it would it would acquire Alert Innovation, a robotics and automation firm that develops material-handling technology for automating order fulfillment in retail supply chains.
In February, Walmart CEO Doug McMillon said he was “most excited about the automation opportunity we have.” He announced plans to increase investments in automation technology as part of Walmart’s $15 billion capital expenditure budget for this year.
U.S. labor law mandates companies with 100 or more employees put up a Worker Adjustment and Retraining Notification (WARN), and provide 60 days’ advance notification of plant closings and mass layoffs.
Apart from Pedricktown, New Jersey, Walmart did not post a WARN notice for the four other locations, as the company is unsure about the total number of employees that will be eventually laid off and re-hired.
The spokesperson declined to call the decision a mass layoff as the warehouses will continue to operate normally.
All workers being laid off will be eligible for jobs and positions at any of Walmart’s 5,000 U.S. stores. The company said it will work closely with their employees to help them find jobs at other locations.
The news comes months after the company laid off nearly 1,500 workers at an Atlanta, Georgia, online order-processing center in October last year.
Meanwhile, in January, the company increased its minimum wage from $12 to $14 per hour.
Walmart is the largest private employer in the United States with about 1.7 million U.S. workers.
Reuters contributed to this report.