After Walmart’s flashy announcement of bonuses of up to $1,000 for some of its workers, the real story played out quietly.
On Wednesday, as news of the bonus announcement was lauded by Trump and Fox News, Walmart abruptly closed down 63 Sam’s Clubs stores. More than 9,000 people lost their jobs. Some only learned about the decision when they showed up to work and found the doors locked.
On Friday, there was news of more pain for Walmart workers. The company confirmed to Business Insider that about 3,500 “co-managers” will be laid off across the country. They will be replaced by new, “assistant manager” positions, which would have a lower salary. The laid off workers will be able to “apply” for these new jobs.
As ThinkProgress reported, while the bonus announcement looked amazing it was much more complicated than it first sounded.
Walmart employees are eligible for the $1,000 bonus only if they’ve worked at the company for 20 years. Most Walmart employees, of course, haven’t worked there that long. Those employees will receive a smaller bonus based on seniority. Walmart didn’t explain exactly how the sliding scale will work, but said the total value of the bonuses will be $400 million. Walmart has about 2.1 million employees, which works out to be an average bonus of about $190.
The one-time bonus Walmart announced this morning amounts to just over 2 percent of the total value of the tax cut to the company.
In fiscal year 2017, Walmart had pre-tax profits of about $20.5 billion and paid an effective federal tax rate of around 30 percent. With a new corporate tax rate of 21 percent, the corporate tax cut is worth at least $1.85 billion to Walmart every year. Since this cut is permanent, the true benefits to Walmart will grow much larger over time. But it’s safe to say that, over 10 years, this corporate tax cut will be worth over $18 billion to Walmart.
“Retail is changing rapidly and we are transforming to meet the needs of our customers…To help compete and win in this environment, we must make changes across our company to enable further investments in our strategic business priorities and growth,” Walmart said in a statement.
The company also announced it would raise its minimum wage from $10 to $11 per hour, an increase that was inevitable to keep pace with changing state laws and competitors who already pay more. The minimum wage increase amounts to just 5 hours of sales.
Walmart’s layoffs after presenting the corporate tax cuts as a boon to workers is part of a pattern of corporate misdirection. AT&T and Comcast also announced bonuses for their employees, while simultaneously laying off thousands.