Walmart’s investment in automation is set to peak in the coming year

Walmart is rapidly automating its supply chain, and over the next year its investments are set to peak, as the company seeks to lower costs and expand profit margins in a competitive environment.

“We’re hitting the peak of annual spending levels on supply chain automation and store remodels,” CFO John David Rainey said in the company’s latest earnings call.

At Walmart US, 50% of e-commerce fulfillment center volume is already automated, and 60% of stores are receiving automated freight. Rival Amazon, for context, is seeking to automate 75% of its operations and replace more than half a million, according to documents obtained by the New York Times.

While Walmart didn’t pinpoint a set number of jobs it’s seeking to automate, Rainey said cutting labor costs with technology is key to the company’s future success.

“When you simplify our model, inventory and labor are our two largest costs,” he said. “Technology-enabled productivity benefits are critical to our ability to grow our core omni-business at lower marginal cost.”

The company is also banking on automation to improve inventory efficiency. To that end, CEO John Furner said a couple thousand facilities are set to get some kind of automation in 2026. He added that a couple of regional distribution centers recently retired their old conveyor belt systems, which had been running for the last 20–30 years.

“The conversion is underway,” Furner said. “We’re really pleased with the capital investments and the returns we’re getting on those.”

One recent example of this kind of investment took place at a regional distribution center in Opelousas, Louisiana. The company spent more than $330 million to “modernize” the facility, according to the state agency Louisiana Economic Development, and notably retained its workforce at the location and shifted them into higher-skilled positions focused on robotics.