In a cost-cutting move, the retail giant Walmart (NYSE:WMT) plans to lay off hundreds of employees, according to the Wall Street Journal. It is worth noting that the news comes ahead of its first quarter results, scheduled for release on May 16.
Additionally, Walmart is relocating its workforce by asking employees in smaller offices such as Dallas, Atlanta, and Toronto to move to larger hubs. The company is also reducing the flexibility of remote work.
WMT’s Cost-Cutting Measures
Walmart began restructuring its workforce following CEO Doug McMillon‘s announcement last year regarding plans to automate 65% of the company’s stores by 2026. This included the closure of three U.S. technology hubs and required several employees to relocate to in-office roles to retain their positions.
In addition, the company has been scaling back its healthcare business due to rising operating costs. Last month, WMT revealed its intentions to close down all 51 of the health clinics it had opened over the past five years.
Walmart’s Q1 Sales and Earnings Could Rise
Wall Street expects WMT to post revenue of $159.53 billion in Q1, up 4.7% year-over-year. Meanwhile, the company’s management expects to witness revenue growth of 4% to 5%. The year-over-year increase is expected to have benefitted from a pickup in e-commerce business and the continued strength of its advertising business.
Analysts expect Walmart to post earnings of $0.51 per share in Q1, compared with $0.49 in the prior-year quarter.
Is WMT a Buy or Sell?
Walmart has 24 Buy and three Hold recommendations for a Strong Buy consensus rating. Analysts’ average price target on WMT stock of $66.19 implies an upside potential of about 10% from current levels. Shares of the company have gained nearly 16% so far this year.
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