After slashing its forecast, Walmart lays off corporate employees.

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The news comes about a week after the company slashed its profit outlook and warned that consumers had pulled back on discretionary spending due to inflation.

Walmart has started to lay off corporate employees, the company confirmed today, a week after it lowered its profit forecast and warned that consumers were pulling back on discretionary spending due to inflation.

In a statement to CNBC, the retail behemoth pointed to layoffs as a way to better prepare for a promising future.

A Walmart spokesperson, Anne Hatfield, declined to say how many workers will be affected or which divisions will be affected. Walmart still needs employees for growing divisions, such as its supply chain, e-commerce, health and wellness, and advertising sales.

Retailers are changing to suit their customers and doing some restructuring.

News of the corporate layoffs first broke in The Wall Street Journal.

Walmart is the nation’s largest employer, with nearly 1.6 million employees in U.S. The company spooked investors July 25 by cutting its guidance for quarterly and full-year profits. There was a chilling effect on the retail sector after that warning, dragging down stock prices for companies like Macy’s and Amazon and raising concerns about the health of the American consumer.

In order to compensate for high grocery and fuel spending, Walmart customers are forgetting to buy items with high margins such as clothing. In order to sell more, it had to slash prices, in spite of the surplus that they would need to offer customers at stores such as Target and Bed Bath & Beyond.

A week later, Best Buy cut its profit and sales forecast, saying that demand for consumer electronics was soft — discretionary purchases that some shoppers could postpone.

There are worries about recessions and the jobs market is increasingly fractured.

In June, there were fewer job openings in the United States than the month before, but America still has 1.8 jobs for every available worker. After many of the businesses that took off during the pandemic such as Walmart’s competitor Amazon have stopped hiring.

In the second quarter, Amazon’s global headcount shrank by 99,000 people to 1.52 million employees. As the company rushed to keep up with customer demand for groceries, puzzles and more online during the Covid health crisis, its workforce almost doubled.

Amazon Chief Financial Officer Brian Olsavsky said on a call with reporters after the company’s second-quarter earnings report last week, was primarily a result of their workforce shrinking.

Other companies, such as Shopify and Robinhood, have recently announced layoffs, and still others, such as Facebook parent Meta and Google parent Alphabet, have said they will slow hiring or focus on increasing productivity within existing teams.

It’s unknown whether Walmart has also slowed the pace of its hiring, allowing the rate of people quitting to decrease. On Aug. 16, the company will report its quarterly earnings and may update its headcount.

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