Walmart has invested billions of dollars in warehouse automation, hoping robots will help move merchandise faster, improve product availability, and reduce operating costs. But as the retail giant expands the technology across its supply chain, technical failures and rising expenses are complicating the transition.
The challenge is significant for a company that relies on a vast network of warehouses to keep its stores stocked and fulfill online orders. Many of its existing facilities were built decades ago, forcing Walmart to install new automated systems while keeping warehouses running.
Founded in 1962, Walmart has grown into one of the world’s largest traditional retailers by revenue and the largest private employer in the U.S. Its automation strategy is intended to make its extensive supply chain more efficient, but the rollout is proving more complicated than anticipated.
Walmart struggles with robot failures
Walmart (WMT) and the robotics companies it hired struggled to develop systems that could sort merchandise into bins while navigating warehouses alongside workers. Some of the technology they tested either failed to perform as needed or proved too expensive.
The company eventually developed small, wheeled robots equipped with motion and obstacle sensors. Walmart is now installing these robots in more than a dozen warehouses, The Wall Street Journal reported.
Rob Montgomery, Walmart’s head of supply chain operations, told the publication that the company is reaching what he described as “peak complexity” as it transitions most of its roughly 200 U.S. supply chain buildings to greater automation.
One persistent problem is that the cardboard shipping boxes Walmart has traditionally used are too large for some automated systems. The small robots that move merchandise through warehouses can break down frequently, while certain oversized products remain difficult for machines to handle.
The challenge is compounded by age and the variety of Walmart’s facilities. Many warehouses were built in the 1980s and 1990s, and the company is retrofitting them without shutting down operations. Different locations require different automated systems to handle various products and tasks, often involving equipment from multiple companies.
Walmart expects spending on store remodeling and supply chain automation to peak this year and next, according to The Wall Street Journal. The investment reflects the cost and complexity of modernizing its operations while maintaining service.
Automation is also increasing some operating expenses. The specialized mechanical and electrical engineers needed to maintain the systems cost more than traditional warehouse labor, while electricity bills at automated grocery facilities can reach $800,000 per month during peak heating or cooling periods, compared with about $250,000 previously, according to a person familiar with the situation cited by The Wall Street Journal.
Walmart is working with Symbotic, a Wilmington, Massachusetts-based robotics company in which Walmart has a 12.6% stake.
In January 2025, Symbotic acquired Walmart’s Advanced Systems and Robotics business under a 12-year exclusive commercial agreement to develop an integrated automated supply chain, according to the SEC filing.
What the automation push means for workers
Walmart’s automation strategy is expected to change the types of jobs needed across its warehouses. As machines take on more repetitive tasks, the company anticipates greater demand for workers who can operate, monitor, and maintain automated equipment.
However, the transition does not necessarily mean widespread layoffs. Montgomery told The Wall Street Journal that workers will still be needed for tasks such as unloading trailers, and the company’s sales growth could require it to maintain a workforce similar in size to its current warehouse staff.
Walmart currently employs more than 140,000 warehouse workers, according to The Wall Street Journal.
The retailer expects automation to help process inventory faster and with greater precision, reducing the frequency of out-of-stock products and lowering costs over time.
The company also wants to improve how merchandise is organized before it reaches stores. Ideally, pallets would arrive in an order that allows store employees to unload products according to where they belong on shelves. That could reduce the time workers spend sorting merchandise and make store-restocking schedules more predictable.
Achieving those benefits, however, depends on Walmart resolving the technical problems affecting its automated facilities and ensuring the systems can handle the wide variety of merchandise moving through its supply chain.
What Walmart has said about automation
Despite the challenges, Walmart has reported progress in expanding automation across its operations.
During its second quarter of fiscal 2027 earnings call, the company said 3,100 U.S. stores were receiving some level of automated freight. It also said more than 50% of its e-commerce fulfillment volume was being processed through automated facilities.
Walmart CEO John R. Furner said the technology was helping the company move inventory more efficiently, deliver products faster, and improve in-stock levels while supporting the growth of its first-party and marketplace businesses.
He also emphasized the potential financial benefits of improving the company’s supply chain network, saying greater density and utilization could reinforce both speed and profitability.
In the second quarter of fiscal 2027, Walmart U.S. reported revenue of $125.2 billion, up 3.5%, while comparable sales increased 2.6%, according to the company’s earnings report.
Operating income rose 20.6%, and e-commerce sales climbed 24%.
Inventory at quarter-end increased by 6% in constant currency, slightly outpacing total enterprise sales growth. Walmart attributed the increase to cost inflation and higher inventory supporting strategic initiatives in the U.S., including efforts to optimize inventory across fulfillment locations.
The results highlight why improving supply chain efficiency remains a priority for Walmart. Automation could help the retailer support online growth, keep products available, and move merchandise through its network more efficiently.
For now, however, the company must balance those long-term ambitions against the technical and operating costs of modernizing a vast network of warehouses that cannot simply stop running while the new systems are installed.
Here’s some of my previous coverage on Walmart: