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Walmart's Reputation Rescue: Investing in People Pays Off
23 Nov
Summary
- Walmart invested $2.7 billion in employee wages and career paths.
- Employee retention improved over 10% as a result of these investments.
- Walmart now approaches AI cautiously, learning from past worker strategies.
A decade ago, Walmart faced severe public criticism. However, under CEO Doug McMillon, the company underwent a significant reputation rehabilitation by investing $2.7 billion in its frontline employees. This investment, which encompassed pay increases and the creation of career advancement paths, drastically improved employee retention by over 10% and fostered a more dedicated workforce. Despite initial shareholder skepticism, this strategy has led to substantial stock growth, nearly 420% on McMillon's watch.
This people-first approach continues to shape Walmart's strategy as it enters the AI age. Unlike many competitors who see AI primarily as a tool for layoffs, Walmart is proceeding with caution. The company acknowledges AI's transformative potential across all jobs and is actively exploring its integration, including a partnership with OpenAI for ChatGPT-driven purchasing, while simultaneously working to prepare its employees for the future.
Walmart's leadership, with McMillon and his successor John Furner having started as hourly associates, demonstrates a deep understanding of the value of entry-level positions. This empathy is crucial as the company studies AI's workforce impact. Walmart aims to "create the opportunity for everybody to make it to the other side," distinguishing its approach from companies that prioritize rapid workforce compression, potentially positioning Walmart to avoid becoming a future corporate pariah.
