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Oct 6, 2023, 12:57pm EDT
tech

Why Walmart thinks AI won’t cut jobs

Walmart
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The News

Thanks to AI tools, a backroom employee at a Walmart supercenter now spends two-thirds less time figuring out whether a product inside a box is needed on store shelves.

What used to require a manual scan of every single package is now done by a smartphone app, which uses augmented reality to scan a wall of boxes and immediately tell a worker whether they contain items that are out of stock.

Walmart, the largest U.S. private sector employer, has a growing arsenal of AI software that its 1.6 million employees use. It could provide a case study in how AI might affect workers, at least in the short term.

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Despite the AI-powered boost in efficiency, the company’s Secaucus, N.J. store — one of the top 20 in the company for product volume — still employs about the same number of people as it did before the tech was rolled out, the company said during a tour of the 190,000-square-foot superstore this week.

Walmart and its labor policies are closely watched; most recently, it reduced the starting pay for some roles like personal shoppers and people who stock shelves, which are some of the jobs that increasingly utilize AI. In January, Walmart increased its hourly minimum wage from $12 to $14.

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The Scene

During the tour, reporters were shown several AI-based tools, including one that automatically determines the most efficient way to load a truck.

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On the store floor, an algorithm determines the best way to organize a shelf based on customers’ buying patterns. And there’s a conversational app that can help employees answer questions for customers.

All of this is aimed at reducing the time it takes to complete routine tasks.

“It has helped our team move at a very exponential pace, to make sure that we’re protecting our sales floor,” store manager Josh Strudl said. “We want to make sure we’re giving the customer the face time, not a box.”

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His store in Secaucus employs about 740 associates. Ivy Barney, senior vice president of operations, said the AI innovations haven’t led to a single person being let go, but “what they do is actually different.”

Some employees, she added, have been moved to other jobs within the store — such as fulfilling online orders or overseeing a self-checkout section. Company-wide, Walmart plans to employ about the same number of people or more as additional AI tech is rolled out over the next several years, a Walmart spokesperson said.

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J.D.’s view

The question of how the latest AI boom will impact the labor market has hung over the rise of the technology, as companies and workers ponder whether more efficient tech will lead to job cuts.

While we’re still relatively early in the AI saga, the Walmart example runs counter to the doomsday “AI layoffs” narratives. One recent common refrain, which the Walmart executives echoed, is that AI isn’t taking jobs, it’s just changing them.

Walmart representatives emphasized that if workers have more time to restock shelves faster thanks to AI, they’ll be able to stock more of them. In that sense, companies could prioritize getting more out of their workers because of AI innovations, rather than cut jobs.

Also, there’s still a human element needed in retail work. It could prove to be one of the least resistant labor markets to AI’s impact.

I got a similar takeaway from a recent conversation I had with Keith Farley, a senior vice president at Aflac who has led innovation efforts for the company. He said the insurance giant has started automating lots of rote paperwork and calculations, but the company hasn’t seen layoffs as a result.

Instead, Farley said, “we’ve had jobs changed.”

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Room for Disagreement

Walmart isn’t using exactly the same type of generative AI chatbots, which have become popular over the last year, that have threatened to transform some industries. And what we saw during the tour didn’t show the full extent of where AI tech will eventually be.

Disruption to the labor force could be significant: a recent analyst report by Goldman Sachs estimated that globally, 300 million jobs could be automated in some way by AI.

The additional reliance on tech can also raise accessibility concerns and questions about how it could affect older workers. To that point, Walmart said it does extensive training and tries to make its employee apps as user-friendly as possible.

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Notable

  • The public’s view on AI and its impact on jobs and society has deteriorated as the technology has progressed, Politico reported last week, citing a Gallup poll that found 40% of Americans think AI does more harm than good. Three-quarters say it will reduce the total number of jobs over the next 10 years.
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