Walmart announced on Tuesday that 65% of its stores will be serviced by automation within the next three years, a development which follows persistent shortages of supply chain workers.
The retail behemoth said in a press release that executives will prioritize logistics innovations powered by both humans and technology in the coming years. As automation arrives at the majority of Walmart stores, which also operate as components of the firm’s logistics operations, some 55% of fulfillment center volume will move through automated facilities, a change that could produce 20% improvements in unit cost averages.
Walmart recently showcased the supply chain innovations at a regional distribution center in Brooksville, Florida, where a combination of data, software, and robotics solutions enables “a more consistent, predictable and higher quality delivery service to stores and customers,” as well as faster reactions to shifting consumer demand. Walmart is one of the largest private sector employers in the United States and currently has 1.6 million domestic associates.
The company noted that the new technology will create roles that “require less physical labor but have a higher rate of pay” even as the number of overall employees are maintained or increased. “We are a people-led, tech-powered omnichannel retailer,” Walmart CEO Doug McMillon remarked in the press release. “As it relates to being people-led, it’s about purpose, values, culture, opportunity and belonging. We serve our associates by creating opportunities.”
The news occurs as the persistent labor shortages which followed the lockdown-induced recession continue to produce difficulties for public and private entities seeking to hire more workers. There exist roughly 9.9 million job openings and 5.9 million unemployed individuals across the economy, according to a report from the Bureau of Labor Statistics, reflecting a labor market that has worsened inflationary pressures as firms increase compensation.
Walmart indeed hiked their minimum wages earlier this year such that average pay for employees across the country will now surpass $17.50 per hour. Amazon, another leading private sector employer, also unveiled nationwide wage increases: average hourly pay for employees in customer fulfillment and transportation are slated to increase above $19.00 per hour, with employees earning between $16.00 per hour and $26.00 per hour depending on their position and their location in the United States.
Walmart addressed the particularly severe worker shortages in their supply chain operations by revealing initiatives meant to help store associates become certified as truck drivers and earn as much as $110,000 during their first year in the new position. The economy as a whole currently has a shortfall of 80,000 truck drivers, according to data from the American Trucking Association, which noted that the figure could expand to 160,000 drivers in the next seven years.
Companies in the service industry have likewise turned toward automation amid the labor shortages: McDonald’s recently created a test restaurant in Texas in which customers can use kiosks and a mobile app to pick up their orders from a conveyor belt rather than interacting with customer-facing staff, while Chipotle tested a robotic tortilla chip maker in a California location.
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Discussions about technological unemployment over the past several decades have centered on blue-collar workers losing their jobs to automation and robotics. The recent widespread adoption of ChatGPT, an artificial intelligence language processing tool that can complete tasks such as writing code or drafting emails in a matter of seconds, has nevertheless broadened the conversation to white-collar professionals. Artificial intelligence could replace as much as 7% of jobs in the United States, according to a report published this week by Goldman Sachs.