Walmart Panics! Is This The End For Them?

Retail Giants Face Unprecedented Challenges: Layoffs, Immigration Policy Shifts, and the Rise of AI

The retail landscape is undergoing a dramatic transformation, with big-box stores like Walmart and Best Buy facing a confluence of significant pressures, as we recently explored. From mass unscheduled firings to a sweeping Supreme Court decision affecting migrant workers, and the looming impact of AI on e-commerce, the traditional retail model is under intense scrutiny.

Walmart’s Staffing Crisis Amid Policy Changes

Walmart, America’s largest private employer with approximately 1.6 million workers in the U.S. and 2.1 million globally, has been at the center of recent staffing concerns. We’ve seen reports of staff panic, with employees claiming they are losing co-workers overnight. This follows earlier announcements of Walmart slashing about 1,500 jobs as part of a restructuring plan to cut expenses and simplify operations, impacting global technology operations, e-commerce fulfillment, and its ad sales division, Walmart Connect.

A significant contributing factor to current staffing anxieties appears to be a sweeping Supreme Court decision that permitted the Trump administration to revoke work protections for a large number of migrant employees. This decision effectively halted a Biden-era parole program (CHNV) which had temporarily shielded over 534,000 Cuban, Haitian, Nicaraguan, and Venezuelan migrants from deportation until the end of 2025, granting them work permits. The removal of this program has created widespread uncertainty for these employees and their employers.

Our findings indicate that some stores have been significantly impacted, with one Redditor claiming their store lost 10 employees who were on work visas, and another reporting their store lost 40 staffers out of 400, representing 10% of their workforce. This has left remaining employees scrambling and, in some cases, stores are turning to elderly employees to fill the gaps, though it’s “not really ideal”. While some retail experts suggest the impact on consumers is likely temporary and regional, viewing it as a “speed bump” rather than a “roadblock,” the disruption is clearly real.

The AI Revolution: The “Death” of the Digital Mall?

Beyond staffing issues, a more profound shift is challenging the very existence of traditional big online retailers like Amazon, Walmart, and Best Buy: the rise of AI-driven commerce. Our analysis suggests that the days of the big online retail homepage, which has long served as the front door to shopping, are numbered.

The emergence of AI-powered assistants and large language models (LLMs) like OpenAI, Gemini, Perplexity, and Grock are not just changing how people search, but how they shop. These AI tools can act as curators, advisors, and shopping guides, providing answers and product links directly, often bypassing traditional digital storefronts. We’ve seen research indicating that traffic from LLMs is nine times as valuable as traditional search traffic. The future appears to be moving towards “agentic e-commerce,” where AI, once it has your credit card information, could simply shop for you. This renders traditional e-commerce retailers vulnerable, risking invisibility unless they adapt.

Strategies for Survival in the Age of AI Discovery

So, how can these giants, and indeed all retailers, survive the “unbundling” of e-commerce? We identified three dominant strategies, drawing parallels from how the news media industry adapted to the rise of the social internet:

1. Price Leadership: For companies like Walmart with substantial purchasing power, being the cheapest remains a viable strategy. LLMs will likely query retailers for the best price, and if the best price wins, these companies could come out ahead.
2. Distribution Network Leadership: Speed and reliability will continue to matter immensely. Companies like Amazon, even if their homepage fades, are poised to win through their unparalleled logistics dominance and efficient delivery machines.
3. Content and Advisory: Much like content drove clicks in media, we believe expert advice will drive retail success. Instead of simply being a store, retailers should aspire to be trusted advisors and curators of selections, offering personal shopping experiences. This is where AI could open new doors, allowing for specialized, personalized advice.

The message is clear: retailers must embrace specialization, personalization, and advisory power. Rejecting AI is not an option for long-term survival. The future of retail is dynamic, and watching how these titans adapt to the age of AI discovery will be truly interesting.