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Now We Know Why Wal-Mart Closed 63 Sam’s Stores and Laid off Thousands

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Now We Know Why Wal-Mart Closed 63 Sam’s Stores and Laid off Thousands

Now We Know Why Wal-Mart Closed 63 Sam’s Stores and Laid off Thousands

The good news was Wal-Mart raising its hourly wages due to political pressure and sometimes new State laws – such as in California and many others to $11/hour. It also handed out employee bonuses due to tax reform (tax cuts).

Then the bad news came: Wal-Mart abruptly laying off thousands of workers and closing 63 Sam’s Clubs across the U.S.

Wal-Mart was quick to put out massive PR about raising the starting hourly wages to $11/hour, expanding employee benefits and offering worker bonuses of up to $1000 in response to the Trump tax cuts…

But…. you knew there was a ‘but’ coming: They were far more covert, however, with the news that on the very same day it was also closing hundreds of Sam’s Club stores nationwide and laying off thousands of workers according to numerous media reports.

Why?

Because forcing companies to pay EVERYBODY when they start work $11 per hour causes a ripple effect that no one tells you about on CNN or anywhere else, really. You have to ask someone who owns a medium or large company.

They’ll first laugh when you tell them how great it is for workers to be paid “a living wage.” But then the truth comes out (if there are no microphones or cameras around).

When you pay everyone just starting out eleven bucks an hour – what about the person who’s been on the job for a couple years, working hard, playing by the rules, showing up on time – DOING THEIR JOB – and just got a raise from $10 to $11 per hour? You think they’re going to stand around and smile when some punk with zero experience, zero training and maybe even zero work ethic gets the same money?

Nope. The owner has to bump up their wages. Let’s say, to $15 per hour and you know what’s next. The loyal, super-experienced people on the job for 5 years knocking it out are not going to stand for that – so they must get a raise and so on and so forth up the ladder until…. guess what?

Yep – layoffs. Store closures. Mechanical checkout machines (god I hate those things) and people on the lowest end of the chain are the ones getting hurt.

So next time you hear how great it is when government tells business what they have to do to help low-wage workers? Just laugh. They do NOT know what the heck they’re talking about – mandatory minimum wage increases HURT the lowest paid employees and we have 63 closed stores, with thousands and thousands of people out of a job completely.

Thanks politicians! And while we’re at it – thanks low information voters! You just screwed the little guy.

And before you say “why don’t the CEO’s take a pay cut????” – let me tell you most of their pay is tied to company performance in the way of stock options and besides – these companies have to compete in the global market. They MUST compete for the best management to run the company in order to win.

You don’t get that? Then you’ve never run a business. Sorry, but you gotta grow up and ask yourself who is taking the risk with the money and who isn’t. You get laid off, you go get another job. The business shuts down and a person’s fortune is gone. You gonna help pay him or her back? Hell no, you’re going to sit and bitch about minimum wage.

So anyway,

Jessica Buckner, an audit team lead at a Sam’s Club location in Anchorage, told local TV station KTVA that all Alaska stores are closing as part of a larger downsizing across the U.S. “From what I heard, there’s over 260 stores that have been closed down,” she said according to CBS News.

The wholesale clubs’ official closure date is Jan. 26, Buckner said.

Shortly after, the company issued a statement, stating that the number of stores for closure is somewhat lower, at 63, if still a sizable number. That compares with a total of five wholesale club stores the company has closed since fiscal 2013, securities filings show.

Ten to 12 of the closed stores could be converted to e-commerce facilities, the spokesperson said. The news is consistent with Sam’s Club’s ongoing plans to optimize its stores to fulfill more online orders and keep pace with internet retailers such as Boxed.

The closures also affect stores in New Jersey, upstate New York, Georgia, Illinois, Indiana, Ohio, Louisiana, North Carolina, Tennessee and Texas. In some locations, per social media, people showed up to work only to be told that their location was closing, with nearly no advance notice.

The chain, which competes with Costco , has more than 650 locations employing more than 100,000 people, with an average of 175 employees per store, according to the company. 

No formal announcement was posted Thursday morning by Sam’s Club, but the company acknowledged the closures on Twitter with a general statement.

Wow, a whole lot of @SamsClub locations shut down today while giving 0 notice to workers. That sounds like the management team alright. They are heartless people. I feel terrible for the thousands of people who just lost their jobs.

After a thorough review of our existing portfolio, we’ve decided to close a series of clubs and better align our locations with our strategy. Closing clubs is never easy and we’re committed to working with impacted members and associates through this transition.

The company drew criticism from people on Twitter who objected to the lack of notice about the closings.

After a thorough review of our existing portfolio, we’ve decided to close a series of clubs and better align our locations with our strategy. Closing clubs is never easy and we’re committed to working with impacted members and associates through this transition.

My problem isn’t with you closing stores. It’s closing stores without telling the employees. How would you, as a social media rep, like to come in to work tomorrow and find out you were fired?

And yes, we will repeat it because it bears repeating: the closures come on the same day that Walmart announced it was raising its minimum wage to $11 per hour.
A Wal-Mart official told Business Insider that 10 of the affected stores will be turned into e-commerce distribution centers, and employees of those will have the opportunity to reapply for positions at their locations.

A Sam’s Club spokesperson added that its pharmacies will continue to stay open for at least two weeks, and they plan to work with each state’s Board of Pharmacy to “help guide this transition.”

All this occurred quite suddenly after Walmart announced earlier on Thursday it was raising the minimum wage for all hourly employees to $11.00 an hour and would expand parental leave and give some employees one-time bonuses of up to $1,000 following the passage of the GOP tax overhaul.

The company said that membership fees at the closed locations will be refunded and that pharmacies at the closing locations will stay open for at least two weeks.

Walmart is the nation’s largest private employer, so there’s no doubt that the layoffs will have an impact on January’s jobs report, which will be released next month.

 

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