Friday, June 3, 2016

Walmart To Replace Workers With Drones At Distribution Centers

A Walmart worker operates a forklift at a distribution center

Walmart will begin using drones to do inventory checks in six to nine months that could eliminate hundreds of jobs at its taxpayer-subsidized distribution centers across the U.S.

The announcement was made during a technology demonstration to reporters where a drone flew up and down aisles in a distribution center while capturing images of barcodes on stacked boxes. The drone can perform as many inventory checks in one day that humans do in a month, Reuters reported.

Walmart has been increasing its number of distribution and fulfillment centers while closing retail locations across Florida, along with the rest of the United States, as the retail giant evolves its brick-and-mortar business model to more online shopping and shipping. Just last month, Walmart took direct aim at online retailers like Amazon by announcing 2-day shipping instead of 3-day shipping.

“We can offer faster and more affordable shipping because we have a unique fulfillment network that includes new large scale fulfillment centers, stores, distribution centers and our transportation network,” Walmart said in a statement.

Although a Walmart employee could operate the drone, the technology could “potentially” mean fewer workers would be needed to take stock or replace missing items, a Walmart spokesman told The New York Times.

But the replacement of jobs with drones calls into question Walmart's long history of seeking tax breaks and subsidies from state and local governments in exchange for the promise to create jobs in local communities. According to a 2004 study by the tax watchdog organization Good Jobs First, Walmart received over $1 billion in economic development subsidies and 90% of its distribution centers had been subsidized. 

In September 2015, Walmart received over $20 million in economic development subsidizes to develop fulfillment centers in Polk County, Florida.

"Because of our work to create a business-friendly environment, more businesses like Walmart are choosing Florida as the best place to grow and create new jobs,” Florida Governor Rick Scott said of the Polk County expansion.

Just last month, Brevard County Commissioners voted 4 to 1 to award Walmart  $3.74 million dollars in real and personal property tax exemptions to develop a warehouse and distribution center at Port Canaveral Logistics Park in Cocoa, Florida. The County's tax breaks require a head count of the jobs created at a certain wage level. Which means that if Walmart doesn't create as many jobs because positions were replaced by drones, Walmart could lose the tax break. 

However, in addition to the County tax breaks, the City of Cocoa will give Walmart an additional $2 million in upfront cash for the same site which is based on the progress of Walmart development of the distribution center, reports Florida Today.

Image credit: Walmart