Kroger To Cut 37% Of Corporate Jobs–Another AI Win

Kroger (NYSE: KR | KR Price Prediction), the century-old grocery giant, will cut 37% of its corporate workforce as it battles the headwinds of high energy prices, rising costs of certain foods, and the success of rival Walmart (NYSE: WMT). CEO Greg Foran told employees, “Simplifying means making faster decisions and deploying more resources where they matter most.” He said AI is making management work “more efficient,” Bloomberg noted. The layoffs will affect about 3,000 workers.

Two competing theories shape what AI will do to the future of American jobs (and those worldwide). The first is that it will increase humans’ ability to do more high-level tasks, and as these become more successful, more people will be needed to extend that success. This view is usually considered a minority view.

Bill Gates recently summarized the second viewpoint. In an essay published last month, he wrote, “Many jobs will disappear forever.” He argues that any other outcome is impossible. AI will become exponentially more efficient at doing what most humans do at work. As AI works its way into the workforce, corporate management will have easy decisions to make as it stretches to increase profits and competitiveness.

The breadth of AI layoffs will affect millions of American jobs, according to those who expect AI’s growing skills and sophistication to drive job loss. Goldman Sachs recently published a report titled, “How Will AI Affect the Global Workforce?” It read, “Occupations with higher risk of being displaced by AI include computer programmers, accountants and auditors, legal and administrative assistants, and customer service representatives.” McKinsey says that, due to AI, “11 million people will need to transition to new jobs.” Its researchers added, “One in seven workers could have a direct pathway into growing jobs, but almost half may face an unpaved pathway.”

The Kroger layoffs are essentially driven by efficiency at the middle-management level. There are strong arguments that AI can do entry-level management jobs at banks and other financial institutions more efficiently. If so, it means a brutal future for white-collar employment.

What may lead to large, future job cuts at Kroger and America’s other largest retailers, drugstore chains, and fast-food businesses is that millions of jobs running stores, handling inventory, and managing checkout can be automated.

Kroger’s layoffs are another example that AI can do some jobs better than people.

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