Walmart confirms the worst fears and makes a drastic decision in the United States

News about Walmart have become almost impossible to ignore lately. The company is at the center of multiple economic debates affecting consumers and the retail sector. However, what seemed to be just a rumor has just been confirmed with a decisive action.

Recently, Walmart announced a significant staff reduction at their corporate offices in the United States, affecting around 1,500 employees. This measure is part of a broader restructuring aimed at modernizing the business and improving the customer experience. 

Walmart Facing Tariff Pressure

The trade dispute between the United States and other countries has put Walmart under constant pressure. In their May earnings call, Walmart's global CEO, Doug McMillon, warned about possible price increases due to tariffs imposed on imported products.

According to McMillon, the tight margins in retail make it difficult to fully absorb the increased costs without passing them on to consumers. Despite this, the company strives to keep prices as stable as possible to avoid a negative impact on their customers.

The U.S. government, particularly Donald Trump, reacted strongly to these statements, urging Walmart not to pass the cost of tariffs on to consumers and to "swallow" those costs. Walmart, however, has certain advantages to face this situation.

Their enormous size allows them to negotiate better prices with suppliers. In addition, they have a program called Grow With Us, which encourages small domestic businesses to become their suppliers. This allows them to reduce their dependence on foreign products and, in this way, mitigate the effects of tariffs on their supply chain, according to The Street.

The Restructuring and Its Consequences

The decision by Walmart to lay off so many employees in areas such as advertising, global technology, and e-commerce fulfillment centers is part of a strategy to adapt to the market. John Furner, Walmart's CEO in the United States, explained that they are eliminating some positions while creating others aligned with their business priorities and growth strategy. This is not the first round of layoffs this year, since in February the company closed their office in North Carolina, affecting hundreds of workers.

Although Walmart insists that tariffs did not motivate these cuts, the economic context doesn't invite optimism. Other retailers such as Target have already expressed expectations of a drop in sales for 2025, citing trade tensions as one of the factors. In this scenario, it would not be surprising if more retailers consider similar adjustments to face possible future challenges arising from tariffs and the global economy.

Walmart, with 1.6M employees in the United States, remains a giant in the market, but current signs point to a complicated environment. The company's ability to innovate and adapt will be crucial to prevent consumers from feeling a direct impact on their wallets.