Walmart CEO Doug McMillon announces starting pay wages Thursday while laying off 11,000 employees as Sam’s Clubs close[/caption]
Thursday morning, Walmart announced that they would be raising the minimum wage for starting employees to $11 an hour and would also give bonuses out to some members of their workforce. Walmart president and CEO Doug McMillon credited the recently passed corporate tax cuts, saying, “Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.” That was Thursday morning.
Thursday afternoon, though, Walmart announced they have closed their Sam’s Clubs, so as the President of Walmart was touting bonuses and an increase in the starting wage for some employees, the company had already closed over 60 Sam’s Club stores. According to reports from Sam’s Club employees, there wasn’t any notice and the closing of the stores will result in 11,000 losing their jobs.
McMillon had announced Thursday that the wages for employees would not go up though for every employee, stating that “Associates that don’t benefit from the new starting wage increase are eligible for the bonus and it will range from $200 to $1,000 depending on your length of service.” Sources though, say that the average employee will not see a $1,000 bonus as most employees have not stayed with the company for that length of time. Any bonuses received would be most like in the $200 range.
The announcement of the increased wages appears to have more to do with how the competition is paying their employees such as Target. Also, the bonuses that have been promised will amount to just 2 percent value of the tax cut that Walmart received under the tax cut. According to the financial reports of Walmart for 2017 they had pre-tax profits of around $20.5 billion. Last year’s tax rate was 30%. The new tax rate now is 21% which means that Walmart will save about $1.85 billion. This cut is also permanent.