Walmart’s AI-Powered Growth Amidst Broader Workforce Concerns
Despite a challenging economic climate and rising job cuts across the US, Walmart is demonstrating the potential of artificial intelligence and automation to drive efficiency and growth. The retail giant recently reported quarterly earnings and revenue exceeding expectations, prompting an optimistic outlook for the remainder of the year, even as other major companies announce significant layoffs.
Strong Q3 Performance Fueled by Automation
Walmart’s e-commerce division experienced particularly robust growth in the third quarter, achieving double-digit gains partially attributed to advancements in automation. According to a company earnings call, over 50% of volume from fulfillment centers now benefits from automation, directly translating into reduced shipping costs. “More than 50 percent of our volume from fulfillment centers is coming from automation, and that translates into lower shipping costs,” a senior financial official stated.
Walmart executives acknowledge the transformative impact of AI on the future of work. CEO Doug McMillon predicts that “every job we’ve got is going to change in some way.” However, the company anticipates maintaining a global headcount of approximately 2.1 million employees over the next three years, suggesting a strategy of role evolution rather than widespread reduction. “As a people-led, tech-powered retailer, we believe it’s our responsibility to prepare Walmart associates for a changing work environment,” a company spokesperson told Newsweek. “We employ a lot of people now and we expect to employ a lot of people in the future.”
AI Integration Across the Walmart Ecosystem
Walmart is actively integrating AI across various facets of its operations. During a recent earnings call, McMillon highlighted the increasing role of AI in software development, with over 40% of new code now being either AI-generated or AI-assisted. Indira Uppuluri, senior VP of supply chain technology, shared in an interview with Supply Chain Dive that the company is leveraging AI for demand forecasting, inventory management, and logistics.
While Walmart emphasizes the benefits of these advancements – faster order processing and improved operational efficiency – the broader economic context reveals a growing concern about the impact of AI on the US labor market.
Rising Job Cuts Signal a Shifting Economic Landscape
The adoption of AI is increasingly cited as a contributing factor to a surge in layoffs across multiple industries. Data from outplacement firm Challenger, Gray & Christmas reveals a stark increase in job cuts. In October, US-based employers announced 153,074 cuts, a 175% increase compared to 55,597 during the same period last year. Year-to-date figures show 1.1 million cuts, 44% higher than all of 2024 and the highest level for the first ten months since 2020.
October’s figures challenged the previously held view, championed by Federal Reserve Chair Jerome Powell, of a “low hire, low fire” US economy. Several major companies have recently announced significant workforce reductions. UPS reported cutting 48,000 positions in the first nine months of 2025, exceeding earlier projections. Simultaneously, Amazon announced plans to eliminate around 14,000 roles, citing “transformative” advancements in AI as a key driver. Education technology company Chegg announced the elimination of around 45% of its workforce, attributing the cuts to the impact of AI and declining traffic from Google.
Walmart’s Strategy: Evolution, Not Elimination
A company spokesperson emphasized that automation is primarily impacting physically demanding roles within Walmart’s supply chain, evolving them into positions focused on operating and maintaining high-tech systems. The company is actively designing new roles, such as automation equipment operator, and providing associates with the necessary skills to transition into these in-demand positions. “In facilities with automation, we’ve seen a significant reduction in turnover,” the spokesperson added.
A workplace expert at Challenger, Gray & Christmas, noted in a recent report: “October’s pace of job cutting was much higher than average for the month. Some industries are correcting after the hiring boom of the pandemic, but this comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes. Those laid off now are finding it harder to quickly secure new roles, which could further loosen the labor market.”
Looking Ahead: Continued Growth and Investment in Technology
Following a successful third quarter, Walmart has raised its full-year net sales growth forecast to between 4.8% and 5.1%, up from a previous target of 3.75% to 4.75%. This positive outlook underscores the company’s ability to navigate a complex economic landscape while capitalizing on the efficiency gains offered by AI and automation, even as the broader workforce grapples with the implications of this technological shift.
