TAMPA, Fla. (KNWA/KFTA) — Walmart investors met in Florida last week for the annual Investor Community meeting where company leaders laid out a road map of the company’s future.

The plan includes a large focus on automation, with Walmart expressing an expectation to have 65% of its stores serviced by automation and for half of its goods to be processed in machine-operated facilities by 2026.

The automation announcement comes just days after it was announced that Walmart would be laying off 2,000 workers at fulfillment centers across the country.

The company outlined ambitious goals of overcoming inflation, finding ways to bring in younger customers and automating warehouses and stores to raise profits. 

State of the company

The year started quietly for Walmart, with company leaders warning of stagnating growth in February. “The consumer is still very pressured,” CFO John Rainey told CNBC in February.

Rainey echoed this on during the investor meeting, saying that the company is “still feeling the effects of higher prices.”

Walmart announced just days before that it would be laying off 2,000 workers, cutting more than 1,000 jobs in Texas, 600 jobs in Pennsylvania, 400 in Florida and 200 in New Jersey. An additional reduction is reportedly planned in California.

The cut jobs were largely at fulfillment centers.

Jacquelyn Cook, a spokesperson for Walmart, said that the layoffs were unrelated to the automation expansion, which was announced two days later.

The company says that, ultimately, it is looking forward to the future.

“Looking at where we are today,” Rainey said, “we believe that approximately 4% sales growth, and growing operating income at a faster rate, are still the appropriate targets for our business over the next three to five years.”

“Achieving our targeted 4% sales growth over the next five years would add more than $130 billion in sales on top of our roughly $600 billion base today,” Rainey added.

The road to the future

Chief Executive Doug McMillon said he expected that by February 2026, about 65% of Walmart stores will be largely automated. 

Additionally, McMillon said that 55% of the retailer’s fulfillment center warehouses will also be automated.

“Our supply chain will become more automated, more connected and increasingly intelligent,” McMillon said.

McMillon, speaking on the second day of Walmart’s annual investor meeting, said that those measures could improve the company’s unit cost averages by about 20%. 

While many across the nation have expressed concerns regarding the rise of artificial intelligence and robotic workers, company leaders say that the new changes will help them better invest in human employees.

The company did say, however, that hiring will remain relatively flat as it pursues this investment in automation.

“We believe our combination of wages and benefits have us well positioned to achieve our growth and profitability objectives,” McMillon said. “We’ll adjust as the market changes, but our current position, including our investment in education, have us in the right range.”

During the meeting, employees described working alongside machines inside distribution centers.

“Now I’m watching the robot unload the truck,” said Jose Molina, a veteran employee. He and coworker Allen Hala spoke with reporters and executives during the meeting.

“We used to be exhausted leaving here,” Hala added. “I actually go home and do a lot more now.”

Robots, autonomous forklifts and scanners have already been teased and even tested by the company for everything from unloading trucks to stocking shelves, all jobs that were once completed by humans.

Walmart has a history of employing new-age tech, implementing scanning robots into retail stores three years ago in a project that has since been abandoned.

Finding profits in new generations

Leaders at the Walmart investors meeting said that they had more than just automation on the horizon.

Representatives from Sam’s Club shared that the growth that they had seen in younger customer bases has skyrocketed and that they’re hoping to capitalize on it with tech.

Kathryn McLay, president and CEO of Sam’s Club said last week that the stores have seen an increase in Gen Z and millennial membership that is overwhelmingly likely to use digital services such as scan and go.

Scan and go, which has been implemented in Sam’s Club stores, is technology that allows customers to scan items as they shop and pay on their phone without stopping at a register.

“Over the past two years, millennials and Gen Z have grown the fastest within our member base, increasing at some 65% and 120%, respectively,” McLay said. “Not only are these cohorts growing, but combined, they have the highest growth rate in sales.”

McLay and McMillon both noted rises in growth with their youngest member bases and cited a push for more technology both in and out of the stores.

“Customers across income cohorts and especially Gen Z and millennials are increasingly choosing to purchase quality, affordable brands that we own, including Member’s Mark at Sam’s and Great Value at Walmart,” McMillon said.