A big change at Walmart and Sam’s Club will save you money

When companies add automation, they ultimately lose workers.

Brands rarely say that out loud, but Walmart did this week in its fourth-quarter earnings call, although the language was a bit coded.

Usually, when a retailer invests in automation — anything from self-checkout to robot-run warehouses — its executives talk about how doing that frees up human labor for added customer service.

“Rather than eliminate jobs, automation has helped retailers like Walmart add new positions and refine existing roles to make them more rewarding,” the chain shared in a 2018 blog post.

That may be true, to a point, but visit any major retail chain, whether it be Walmart, Target, Kroger, or any other retailer heavily invested in automation, and tell me if you feel like there’s more labor on the floor. That, of course, is anecdotal, but Walmart shared its true automation intentions during its Q4 call.

Walmart CFO John Rainey shared how Walmart has been using automation.

“In Walmart U.S., approximately 60% of stores are receiving some freight from automated distribution centers and approximately 50% of eCommerce fulfillment center volume is automated,” he shared.

This, he noted, helps with both shipping digital orders and supplying store shelves.

“This enables better visibility into what inventory we own and inventory we can access and also improved our labor productivity. With the proximity so close to customers, we’re increasingly leveraging stores as digital fulfillment nodes to move inventory faster and more efficiently than ever before,” he added.

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Rainey also made it clear that cutting labor costs was a key goal.

“When you simplify our model, inventory and labor are our two largest costs. Technology-enabled productivity benefits are critical to our ability to grow our core omni business at lower marginal cost,” the CFO explained.

“It’s very clear that AI is going to change literally every job,” Doug McMillon, who recently stepped down as Walmart’s CEO but remains on the chain’s board, told The Wall Street Journal. “Maybe there’s a job in the world that AI won’t change, but I haven’t thought of it.”

He made it clear, however, that Walmart wasn’t looking to shrink its workforce.

“Walmart plans to freeze the company’s global headcount of 2.1 million workers for the next three years while still forecasting revenue growth the company says will come from wider adoption of AI technologies,” he added.

That’s a goal that even McMillon admits may be hard to deliver on.

“Our goal is to create the opportunity for everybody to make it to the other side,” he said.

Employers generally don’t talk about their plans to automate jobs because it’s demotivating for existing employees. Nick Glynne, CEO and founder of Buy It Direct, which owns Appliances Direct, a large retailer in the United Kingdom, told BBC 5 Live’s Wake Up To Money that he expects to get rid of 500 of the company’s current 800 workers,” Supply Chain Brain reported.

“A mixture of AI on the office side, and technology involving robots and automation and mechanization in the warehouse, means that the future for employing U.K. people is very bleak for someone like us,” Glynne said.

The numbers in the U.S. appear bleak as well.

Between 6 million and 7.5 million retail jobs could be eliminated by automation in the coming years, according to a recent study conducted by Cornerstone Capital Group for the Investor Responsibility Research Center Institute (IRRCi).

“Retailers are facing a perfect storm: they need to balance demand for wage increases with the negative optics of future job losses. The winners in retail will be companies that provide recruitment, retention and training for workers and innovate with forward-thinking future store strategies,” Cornerstone CEO Erika Karp told RetailDive.

Amazon CEO Andy Jassy also noted that AI and automation will change the nature of work.

“As we roll out more generative AI and agents, it should change the way our work is done. We will need fewer people doing some of the jobs that are done today, and more people doing other types of jobs,” he wrote in his 2023 annual letter to shareholders.

Since that letter, Amazon has carried out multiple rounds of layoffs affecting its corporate workforce.

October 2025: Amazon announced plans to cut 14,000 corporate jobs as part of organizational restructuring and efficiency improvements, according to the Associated Press.

January 2026: The company confirmed it would eliminate about 16,000 corporate positions, marking a second major round of workforce reductions, added the same AP article.

30,000 total cuts: Those two rounds bring Amazon’s corporate job reductions to roughly 30,000 positions since late 2025, equal to about 10% of its corporate workforce, KJWL reported.

AI and efficiency cited: In announcements and internal memos, Amazon leaders linked the restructuring and job cuts to efforts to simplify the organization, streamline operations, and adapt to AI/efficiency gains rather than direct financial distress, according to the AP.

Approximately 15.5 million Americans were employed in the retail trade sector in late 2025, according to Bureau of Labor Statistics data.

“BLS projections also show retail trade employment is one of the few sectors expected to lose jobs over the longer term (2023-33) as part of broader labor market shifts,” the government agency added.

Related: Iconic 118-year-old grocery chain shuts down closes for good

This story was originally published by TheStreet on Feb 22, 2026, where it first appeared in the Retail section. Add TheStreet as a Preferred Source by clicking here.