By Hugh CameronShareNewsweek is a Trust Project memberWalmart is celebrating the efficiency-maximizing potential of its technology initiatives, but the effects of artificial intelligence and automation have already begun to reshape the United States workforce and have been linked to a wave of layoffs implemented by other companies this year.
In its most recent quarterly report, Walmart’s earnings and revenue came in ahead of expectations, prompting the retailer to lift its forecasts for the remainder of the year. Its e-commerce arm enjoyed a particularly successful third quarter—recording double-digit growth—which the company attributed in part to progress made in automation.
“More than 50 percent of our volume from fulfillment centers is coming from automation, and that translates into lower shipping costs,” Chief Financial Officer John David Rainey said in a subsequent earnings call.
Why It Matters
Walmart executives have acknowledged the potential impact of AI on their workforce, with CEO Doug McMillon predicting that “every job we've got is going to change in some way.” However, Walmart expects its global headcount to remain flat at around 2.1 million over the next three years, The Wall Street Journal reports, as the technology eliminates some roles while creating and altering others.
“As a people-led, tech-powered retailer, we believe it’s our responsibility to prepare Walmart associates for a changing work environment,” a Walmart spokesperson told Newsweek. “We employ a lot of people now and we expect to employ a lot of people in the future.”
What To Know
During last week’s recent earnings call, McMillon said Walmart was “adopting artificial intelligence in its various forms across the company.”
“Take software development, for example,” he continued. “When AI is used for software development, more than 40 percent of the new code is either AI-generated or AI-assisted.”
In an interview with Supply Chain Dive, Indira Uppuluri, senior VP of supply chain technology at Walmart, said that the company was employing AI in everything from demand forecasting to inventory and logistics management.
While Walmart has highlighted the potential for technology to speed up order processing and its overall operations, such advancements carry the risk of reducing demand for human labor. AI has been cited as a driving force behind many of the mass layoffs this year, which have contributed to an increasingly negative picture of the job market in 2025.
...Outplacement firm Challenger, Gray & Christmas found that U.S.-based employers announced 153,074 job cuts in October, a 175 percent increase from 55,597 a year prior. Year-to-date, employers have announced 1.1 million cuts, 44 percent higher than in all of 2024 and the highest level for the first 10 months since 2020.
October proved a wake-up call for many who had, until recently, taken Federal Reserve Chair Jerome Powell’s view that the U.S. economy was a “low hire, low fire” environment.
Last month, UPS said it cut 48,000 positions in the first nine months of 2025, more than double the 20,000 the shipper anticipated back in April. In a memo published on the same day, Amazon told employees it would be cutting around 14,000 roles, citing “transformative” advancements in AI as the basis for its confidence in the decision.
Chegg also announced the elimination of around 45 percent of its workforce in October, Reuters reported. The education tech company said that the “new realities of AI and reduced traffic from Google to content publishers have led to a significant decline in Chegg's traffic and revenue.”
What People Are Saying
Walmart CFO John David Rainey told analysts last week: “Technology and AI have been enablers of efficiency gains. We're using AI across the organization to manage cost effectively and to accelerate our growth. As we continue to invest in supply chain automation, we're also seeing improved efficiency and fulfillment economics. In Walmart US, more than 60 percent of our stores are now receiving some freight from automated distribution centers, and more than 50 percent of our e-commerce fulfillment center volume is now automated, which is driving better unit productivity and helping to lower the cost to serve.”
Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas, wrote in its recent report: “October’s pace of job cutting was much higher than average for the month. Some industries are correcting after the hiring boom of the pandemic, but this comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes. Those laid off now are finding it harder to quickly secure new roles, which could further loosen the labor market.”
A spokesperson for Walmart told Newsweek: “With regards to automation, we’re seeing the biggest gains in our supply chain facilities. The technology is allowing us to evolve some of our physically demanding jobs into roles where associates are operating and maintaining high-tech systems. We’re designing new roles, such as automation equipment operator and equipping our associates with the skills to move into these in-demand positions, that associates tell us are more enjoyable. In facilities with automation, we’ve seen a significant reduction in turnover.”
What Happens Next
Following its third-quarter success, Walmart raised its full-year outlook, now anticipating net sales to grow between 4.8 percent and 5.1 percent, up from a previous target of 3.75 percent to 4.75 percent.
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