Bentonville, Arkansas-Wal-Mart Corporation today announced a series of cost-cutting moves designed to decrease expenses and improve corporate profits. In this latest initiative, Wal-Mart executives announced a plan to replace over 4,500 current employees with lower-paid newcomers.
Only two years ago, these soon to be laid off workers were themselves hired to replace previous employees with “high salaries.” This second round of employee replacements has been described as aggressive cost cutting intended to drive almost all costs out of salaries.
A Wal-Mart company spokesman, Chris Martinez, told Red Tractor USA that, “We are determined to save money and increase profits whenever possible. If this can be accomplished by continuing to cut employee salaries, then we will always make these moves.” With this round of employee replacements, Wal-Mart is creating its own definition of “Minimum Wage.” Martinez told Red Tractor USA that the company was considering a new internal marketing slogan that states, “At Wal-Mart, minimum wage means minimum wage.”
According to an internal Wal-Mart memo recently obtained by a Red Tractor USA investigative reporter, the company’s Human Resources department has been telling store managers that, “We are moving towards an eventual model where employees will pay us instead of us paying them.” The same memo also states that Wal-Mart foresees people wanting to work at Wal-Mart for free in return for the corporate benefits, steep employee discounts, and the chance to be associated with an American success story.
The company believes that many of its customers would jump at the opportunity to work for free at Wal-Mart if they could receive an employee discount on their already cheap products. The memo states, “We believe that there are many young single mothers that would jump at the chance to work at Wal-Mart for free in return for employee discounts on baby diapers, food, and formula.”
On Wall Street, investors viewed positively the announcement of additional job replacements at Wal-Mart, as its stock price surged three dollars on the news. Connecticut-based retail consultant Shari Klaus, President of Klaus & Company, told Red Tractor USA that, “Wal-Mart continues to be the leader in cost reduction in the retail store industry, and, if that means driving cost out of salary, that would likely give them a competitive advantage for years to come.”