Retail giant Walmart is cutting its starting wages for some new hires as competition among employers looking to tap into the red-hot labor market starts to subside.
Under the new system—which was first reported by the Wall Street Journal on Thursday—most of Walmart’s new hourly workers now earn the lowest hourly pay rate available in their store when they join the company.
Until July, when the changes to Walmart’s pay structure came into effect, some new hires—such as those who fulfilled online orders or stocked shelves—earned a little more than other new hires like cashiers.
If they had been hired three months ago, the new employees doing those jobs would have been around a dollar-an-hour better off for each shift they worked.
A spokesperson for Walmart was not immediately available for comment when contacted by Fortune.
However, the company confirmed the changes to the company’s pay structure to several media outlets.
In documents seen by the WSJ, Walmart told employees the new pay offerings would allow staff to move between different roles within the store without their pay being impacted, ultimately leading to “better staffing throughout the store.”
Representatives for the company told the publication the pay alterations would better enable workers to diversify their skillsets and progress professionally.
A spokesperson confirmed to news agency Reuters that the changes would not impact existing employees’ pay.
Walmart, which has topped the Fortune 500 for 11 consecutive years, saw its revenues rise 6.7% to reach $611.3 billion in its most recent fiscal year.
The grocery chain is the largest private employer in the U.S., with more than 2 million workers on its books.
Recent pay boosts
The company has been boosting pay and benefits for its U.S. employees over the past few years in a bid to compete for talent, and currently offers its staff perks like healthcare, help with college tuition and an average wage of more than $17.50 an hour.
Its latest decision to scale back its pay offerings for new hires comes just months after the company said it would raise its minimum wage by $2, putting its lowest hourly rates of pay between $14 and $19 depending on location.
That move came as the labor market remained unusually buoyant in the face of economic uncertainty and sticky inflation, increasing competition for retail workers—but indicators suggest the U.S. jobs market is finally beginning to cool off.
Last month, hiring picked up slightly, but the number of jobs added to the economy remained much lower than it had been earlier in the year. Meanwhile, the unemployment rate rose to 3.8%—the highest it’s been since February 2022.
Wage growth also slowed in August, as average hourly earnings increased by 0.2%—the slowest pace since early 2022.
Bill Adams, chief economist at Dallas-based Comerica Bank, said in a note after the August jobs report was released last week that the latest data showed “a big slowdown in hiring reflecting cooler labor demand.”
That could mean employers have to do less to compete for new staff.
“After huge disruptions in the last few years, the labor market is settling into a more normal state,” Adams said. “While most Americans who want a job have one, it is not as easy to find new work as a year ago. Hires and quits are back to their pre-pandemic levels, and job openings are falling rapidly. At the same time, employers are having a slightly easier time attracting and retaining workers.”