Walmart boosts starting pay, closing dozens of Sam’s Clubs

NEW YORK Walmart confirmed Thursday that it is closing dozens of Sam’s Club warehouse stores across the country — a move that seems sure to cost jobs — on the same day it announced that it was boosting its starting salary for U.S. workers and handing out one-time bonuses to others.

The world’s largest private employer said it was closing 63 Sam’s Clubs over the next week, with some shut already. A company official who spoke on condition of anonymity because he was not authorized to discuss details of the decision publicly said about 10 are being repurposed into e-commerce distribution centres. He said it was too early to say how many people would lose their jobs since some will be placed at other Walmart locations or be rehired to the e-commerce sites.

On Twitter, Sam’s Club responded to people’s queries by saying, “After a thorough review of our existing portfolio, we’ve decided to close a series of clubs and better align our locations with our strategy.”

Walmart had earlier cited tax legislation that will save it money in announcing the higher hourly wages, one-time bonuses and expanded parental benefits that will affect more than a million hourly workers in the U.S.

Rising wages reflect a generally tight labour market. The conversion of stores to e-commerce sites also illustrates how companies are trying to leverage their store locations to better compete against Amazon as shopping moves online.

Online retailers typically pay warehouse employees who pack and ship orders more than store jobs pay. Job postings at an Amazon warehouse in Ohio, for example, offer a starting pay of $14.50 an hour.

“This is about the evolution of retail,” said Michael Mandel, chief economic strategist at the Progressive Policy Institute. “The rise of ecommerce is leading to higher wages.”