Most people assume that, over the next three years, major retailers will cut huge numbers of workers because of artificial intelligence (AI). Walmart Inc. (NYSE: WMT), McDonald’s, Starbucks, and Costco will, in total, fire hundreds of thousands of people and save hundreds of millions of dollars. AI will allow them to cut frontline workers, and much of the savings will go to their bottom lines.

24/7 Wall St. Key Points:

• Walmart Inc.’s (NYSE: WMT) CEO believes artificial intelligence will change “literally every job” over the next three years.
• Yet, he expects the company’s employee count will not change much.
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Any public company that does not make these cuts will watch its stock be hammered because the management will be viewed as living in the tech Middle Ages. Low-wage and low-skilled workers in stores are at checkout and in customer service. They also handle inventory and put merchandise on shelves. The transition has already begun. Checking out without cashiers at many stores is already in place.

Not So Fast

Walmart CEO Doug McMillon says, “Not so fast.” In comments picked up by The Wall Street Journal, he said, “It’s very clear that AI is going to change literally every job.” However, he expects Walmart’s employee count will not change much over the next three years. Walmart is America’s largest employer outside the government, with 1.6 million workers.

McMillon says he sees growth in people who handle home delivery and bakeries. In-store maintenance jobs may increase as well.

McMillon readily admits that chatbots will help people shop. The number of people in warehouses will fall, and robots will handle much in-store work. However, “We are going to put people in front of people.” The theory is that people don’t want the advice of a robot when they are deciding what products to buy.

The plan has a flaw: McMillon does not explain how Walmart will retain employees as AI takes on a larger role. Donna Morris, Walmart’s chief people officer, said, “We’ve got to do our homework, and so we don’t have those answers.” This might give Walmart workers a false sense of security.

Morris’s comment is at the heart of the matter of how companies keep employment counts level. Across many industries, AI is expected to replace jobs such as paralegals, software developers, truck drivers, farm workers involved in harvesting, and even higher-level positions like air traffic controllers.

The fact is that ever more jobs are not guaranteed as AI becomes more advanced.

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