A worker is seen wearing a mask while organizing merchandise at a Walmart store, in North Brunswick, New Jersey, July 20, 2020.
Eduardo Munoz | Reuters
Walmart announced Thursday it will raise pay for workers to an average above $15 an hour, giving a boost to 425,000 employees.
Walmart said its minimum starting wage for workers will remain at $11 an hour. Its U.S. workforce numbers about 1.5 million people, making it the nation’s largest private employer.
The big-box retailer made the announcement as it reported holiday-quarter earnings that fell short of Wall Street’s expectations, weighed down by Covid-related expenses and heightened investments in e-commerce. Walmart also cautioned that it expects its sales growth to moderate this year.
Walmart shares were down more than 5% in early trading.
Beginning March 13, the company said, pay for store workers in digital and stocking positions will go up to $13 to $19 an hour, depending on store location.
Target raised its minimum wage to $15 last summer. It had previously planned to raise wages by the end of 2020, but accelerated that timetable during the pandemic.
Walmart CEO Doug McMillon, who is also chairman of the Business Roundtable, has previously said that the retailer believes the federal minimum wage should be higher.
McMillon said Thursday at a virtual investor meeting that the company has taken a different approach with its wage hikes rather than raising minimum wages to $15 across the board. Hourly pay at Walmart varies based on where a store is based, he said.
He added that the retailer is committed to creating a “ladder of opportunity” for workers, noting that about 75% of store management joined the company as an hourly employee.
“We will raise our starting wage over time, and I think our history proves that,” McMillon said.
—CNBC’s Melissa Repko contributed to this reporting.