What Walmart's RTO mandate is really about

Walmart's return-to-office mandate isn't just another big company reversing pandemic-era remote work. It's also a return to its historic ways.

• Walmart said last week it will lay off several hundred workers and relocate others.
• "It's a reversion to what Walmart was known for a few years ago," an expert told BI.
• But unlike some recent episodes of "quiet firing," there appears to be more at play for Walmart.

Walmart's announcement on May 14 that it'll lay off several hundred workers and relocate others to one of three main campuses is another example of a big company reversing a pandemic-era embrace of remote work. 

For Walmart, it's also a return to what it knows and what helped build it into the world's largest retailer: centralized control. 

Founder Sam Walton famously built his own logistics network from the ground up to avoid relying on another carrier to serve his sprawling empire of stores. And the company has reportedly regularly flown senior executives on corporate jets from its Arkansas HQ to regions of the country where their stores are located, helping them, in some cases, avoid staying overnight.

Now, the retailer is requiring hundreds of previously remote employees to move within commuting distance of the company's Bentonville, Arkansas, main office or hubs near New York and San Francisco.

"It's a reversion to what Walmart was known for a few years ago," said Nelson Lichtenstein, a research professor in the history department at the University of California, Santa Barbara, who focuses on labor and has studied Walmart. 

"They were, in a way, very centralized. Executives lived in Bentonville," he told Business Insider. 

'We make decisions faster, we're more creative'

CEO Doug McMillon told investors on May 16 that the company's culture is stronger when workers are together. "We make decisions faster, we're more creative, and we help develop the next generation of talent." 

Walmart's chief people officer, Donna Morris, commented similarly in a memo announcing the layoffs and relocations earlier that week. She wrote that working in an office would help workers collaborate, innovate, and "move even faster." Walmart didn't comment further to BI at the time.

Morris' memo also hinted that the decision was years in coming, referring to a February 2022 move to bring Home Office employees back into the offices after pandemic lockdowns. Still, some employees continued working remotely, and several satellite offices remained open in cities like Atlanta, Dallas, Toronto, and Seattle.

Of course, Walmart has invested heavily in having more people come to work in-person in Bentonville. Opening in phases through 2025, the company's new 350-acre campus will feature modern offices, restaurants, childcare facilities, a hotel, bike paths, and multiple lakes.

A new normal

The company's decision also represents an about-face from just a few years ago when Suresh Kumar, Walmart's global chief technology officer, wrote on LinkedIn about a shift toward remote work for Walmart Global Tech. 

"We believe the future in tech will be one in which working virtually will be the new normal, at least for most of the work we lead," Kumar wrote in 2021. 

Following the layoff news, Kelli Oakes wrote on LinkedIn that she'd lost her finance recruiter job for Walmart and Sam's Club after having been hired as a permanently remote worker nearly three years ago.

"I'm devastated, embarrassed, sad, angry, defeated, and hurt," Oakes wrote. 

She said the company offered her the chance to apply for a new job in Bentonville, the Bay Area, or Hoboken, New Jersey. "Truthfully, after a home purchase and life-threatening post-birth complications, my family cannot afford to relocate now or in the near future," Oakes wrote. She said she'd returned from maternity leave two months ago and purchased a home in South Carolina eight months ago.

Even workers whose jobs are technically safe from cuts are having to weigh the cost of uprooting their lives to move to Northwest Arkansas or an expensive coastal city.

It's not all about quiet firing

One remote worker told BI he and several colleagues were offered "generous" relocation packages to move to the Bay Area, but accepting one would take him away from his family and result in a more than 50% increase in the cost of living. He asked BI not to use his name as he is still employed and not authorized to speak to the media. BI verified his identity and employment at Walmart.

"Five months to move is not a lot of time to close up your life," he said.

He also said he doesn't think the company is using this RTO mandate as a cover for achieving cost savings through workforce reductions, commonly referred to as "quiet firing," but that it's more part of Walmart's ethos.

Lichtenstein, the UC professor, said Walmart's decision isn't surprising given that many corporate leaders appear to have an impulse to gather people in one place. 

"You're able to sort of pop in on them. It's a form of supervision and control. CEOs feel that even if statistics show that someone working at home is just as productive, they want them there," he said. "One of the hallmarks of Walmart efficiency was there was kind of close supervision from the stores on up." 

Indeed, many companies have settled on having workers back in the office at least some of the time, and while many are pushing for more time in-office, there's an increasing acceptance of hybrid work. A recent survey of big-company US CEOs found about one-third expect their workers will be back in the office five days a week in the next three years. The study by KMPG US a year earlier found that nearly two-thirds of CEOs thought offices would be full every weekday. 

Yet not all workers are happy about resuming — or starting — a commute. A recent poll by the resarch firm Gartner found that return-to-office mandates were a factor in pushing 36% of workers seeing senior-level jobs to look for a new role. 

For the remote worker BI spoke with, the next few weeks will be filled with uncertainty.

"I don't have a problem going to an office, but to be forced to leave family, pack up, and move, all in such a short timeframe," he said. "It's going to be a tough decision."

If you work for Walmart and were affected by this decision, please contact reporter Dominick Reuter via a non-work email and device or text/call/Signal at 646-768-4750. Responses will be kept confidential.