In the strongest months as the economy recovered from the Great Recession, America added between 150,00 and 350,000 jobs a month, according to the BLS. In an average month, that number was closer to 175,000. Walmart, Inc and Amazon.com Inc have announced they will add about 350,00 jobs between them, as demand for their services soars. While they cannot, as two companies, make a considerable dent in the rise of unemployment, they will cushion the blow.
Walmart said it would need 50,000 new workers. It had already said it would require 150,000. It will pay current associates $180 million in supplemental income distributed through hourly wages, as consumer demand for its inventory increase store traffic and e-commerce rises.
Amazon said last month that it would add 100,000 people, mostly for delivery and warehouse positions. It will also increase worker hourly pay. More recently, Amazon announced it would add another 50,000 as demand for its e-commerce systems continues to rise.
The increases are mixed blessings. The success of the two companies has likely hurt mostly bricks-and-mortar companies like Macy’s Inc (NYSE: M) and Nordstrom, Inc. (NYSE: JWN) and J.C. Penney (NYSE: JCP), which have temporarily shuttered hundreds of stores that have cost tens of thousands of jobs. This doe not entirely negates the Amazon and Walmart successes.
Walmart and Amazon were already unusually successful. Amazon’s fourth-quarter North American sales were $53.6 billion, on which it had $2.2 billion in operating income. That revenue figure has been rising at about 20% a year. Its Prime movie and free shipping business have cemented many of its customers, added a steady stream of recurring revenue. Amazon’s share of U.S. e-commerce has been pegged as high ar 30%.
Walmart U.S. had revenue of $92.3 billion in its most recent quarter, and Its operating income was $4.4 billion. Its Sam’s Club operations brought in revenue of $15.3 billion for the period. Sam’s operating profit was $3.4 billion on that sum. Grocery shopping dove most of the growth at Walmart U.S. So did the fact that 90% of Americans are within 15 miles of one of Walmart’s 4,756 stores. Walmart is the nation’s largest employer, with over 1.1 million people.
Over 20 million American’s have filed for unemployment in the last four weeks. Very few companies are adding in substantial numbers. Walmart and Amazon have at least formed a modest firewall.