After Paying Employees Higher Wages, Walmart Cuts Their Hours

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After spending $1 billion to raise employee’s wages, Walmart had to cut their hours in order to keep expenses down, Bloomberg reported.

Walmart increased wages to $9 an hour in April as a way to improve customer service. But the wage increase has weighed on earnings so much that the store has had to cut worker’s hours to rein in expenses.

"The request has resulted in some stores trimming hours from their schedules, asking employees to leave shifts early or telling them to take longer lunches, Bloomberg states. "The reductions started in the past several weeks, even as many stores enter the busy back-to-school shopping period."

An employee at a Walmart in Houston, Texas, said the store she works at cut more than 200 hours a week. Managers asked employees to leave work early including sales-floor associates and department managers.

Because of the reduction in hours, Walmart customers have experienced longer wait times. One example of this was a customer that had to wait 30 minutes for a Walmart employee to unlock a product just to purchase it.

Another problem associated with the wage increase was that senior employees thought the move was unfair to more tenured employees. "Some of the chain’s more senior employees have criticized the increase, saying it mostly benefited newer workers and that more experienced staff shouldn’t be making at or near what new hires are paid," the article states.

In an attempt to improve customer service, Walmart is now risking losing its best employees because of the loss of hours, according to Burt Flickinger, managing director at Strategic Resource Group LLC.

"By cutting hours, Walmart now risks losing some of its best employees to competitors that can provide more stable schedules," Flickinger said. "The company may also alienate customers if the staffing levels result in poorer customer service and products not getting on store shelves."

Ali Meyer

Ali Meyer   Email Ali | Full Bio | RSS
Ali Meyer is a staff writer with the Washington Free Beacon covering economic issues that expose government waste, fraud, and abuse. Prior to the Free Beacon, she was a multimedia reporter with CNSNews.com where her work appeared on outlets such as Drudge Report and Fox News. She also interned with the Heritage Foundation and Pacific Research Institute. Her Twitter handle is @DJAliMeyer, and her email address is meyer@freebeacon.com.

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