Reference no: EM133177109

Based on the given article, answer the following (A) and (B)

(A) Explain the likely effects of Walmart's restructuring effort on

(i) Wage costs,

(ii) The quality of customer service

(iii) Employee retention

(B) What are potential downsides or risks?

Explain in sufficient quantity

*Article

Walmart to Try Thinning Store Manager Ranks
In test, some stores have fewer, higher paid managers overseeing teams in an effort to give front-line workers more ownerships over their jobs

Walmart is testing a new store employee structure, in some cases using fewer midlevel, in-store managers to oversee workers while boosting pay and responsibilities for those roles.

The shift comes as the country's largest employer works to control labor costs, keep workers longer and attract talent, while spending more to raise wages.

Around 100 Walmart stores-mostly Walmart's Neighborhood Markets chain and smaller supercenters-are testing several versions of a new employee structure dubbed "Great Workplace." Under it, Walmart is asking workers now called assistant store managers and department managers to apply for fewer, but higher-paying jobs structured around managing teams of workers. Current managers need to apply for the new roles, often called business leads, team leads and academy trainers.

Walmart executives say the genesis of the new worker structure wasn't cost savings, but rather adapting its workforce to shifting shopping habits online and employee demands. The changes include giving more decision-making power to people on the floor, while giving good managers elevated roles.

For example, test stores let workers help customers with requests such as returning items or changing a price without multiple authorizations-and groups them into teams that communicate and complete tasks across shifts, said Drew Holler, senior vice president associate experience for Walmart U.S.

"That is probably the game changer in this, we are pushing decisions down," he said. The new team leaders manage multiple departments and a team. Previously a department manager was more focused on completing tasks in a single department, said Mr. Holler.

So far in many of the test stores, the number of salaried managers has fallen, while head counts overall have stayed steady or increased, he said. Frontline workers are more engaged, he said.

The new structure could change as Walmart learns what works best and won't necessarily be rolled out to all of Walmart's 4,600 U.S. stores, Mr. Holler said.

The test is part of Walmart's larger efforts to remake its U.S. store workforce of over a million employees as it invests in new services to better compete with Amazon.com Inc. Walmart has spent heavily to refurbish stores, add online grocery delivery and store pickup, and offer faster shipping for online orders. Walmart is also focused on using the new team structure to elevate workers with better management skills and the ability to keep their teams happy to reduce turnover, a major expense for retailers with millions of low-skilled hourly workers.

In test stores, managers are given more training on how to motivate workers and give recognition for good performance. At the start of shifts, team meetings and managers are encouraged to dole out blue stars for good performance, according to internal documents viewed by the Journal. Meetings should start with the Walmart cheer, a long standing corporate tradition of shouting out the letters that spell Walmart to start meetings. Managers could pass out candy at meetings when workers offer a good idea, the documents said.

But it is also controlling labor costs. Last year Walmart thinned its ranks of employees in store co-manager positions and is currently reducing the number of training and human resources jobs. As part of this process, workers were asked to reapply for a single "people lead" role, said a spokesman. Those not selected for "people lead" roles can apply for other jobs in stores, he said.

After decades of growing its workforce and store count, Walmart has been shrinking or slowing growth for both, cutting jobs when closing stores, using automation to cut down the hours needed to complete some tasks and laying off workers more regularly in corporate offices.

Walmart said in a regulatory filing in March that it had fewer global employees last year than the previous year for the first time in at least two decades, reporting 2.2 million global workers in 2018, down from 2.3 million the previous year. The retailer's international employee base fell to 700,000 workers in 2018, down from 800,000 the previous year, in part because Walmart sold its Brazilian operations to a private-equity group last June. Walmart has sold international units in the past, but kept its total worker counts rising through store growth in the U.S.

Earlier this year Walmart said it plans to add thousands of robots to stores to help monitor inventory, clean floors, and unload trucks more quickly. In recent years, Walmart and other retailers, including Target Corp., have also added cash-counting machines to store backrooms, reducing the need for store-level accounting jobs. Walmart has also added new roles to serve online shoppers, including around 40,000 jobs that include collecting items in stores ordered online for pickup or home delivery.