August 18, 2015—Just months after giving raises to half a million U.S. workers, Walmart says its profits have taken a major hit.
The company, which raised its minimum starting wage to $9 an hour in April and plans to raise it to $10 in 2016, said it has seen sales and customer experience improve. But paying workers more, increasing worker hours, and adding back positions like greeters and department heads contributed to an 8.2 percent decline in operating income from the year before.
On Tuesday, the world’s largest retailer by revenue lowered its profit outlook for the year, and said it would look to cut costs in its supply chain and other parts of its business. “We’re not done yet, this is a big investment,” CFO Charles Holley told reporters on a conference call.
Walmart isn’t alone.
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