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The rise of AI has brought sweeping\u2014and often uneasy\u2014predictions about the future of work, with some tech leaders warning that entire categories of jobs could disappear. Elon Musk, for example, believes that in as soon as 10 years time, work could be completely optional thanks to the rise of robotics.<\/p>\n
But while some companies have already used AI as a justification for reducing headcounts, Costco\u2019s CEO Ron Vachris is pushing back on that narrative. Technology, he said, is not degrading jobs\u2014but rather improving them.<\/p>\n
\u201cWe\u2019ve not displaced people because the business is growing at a faster rate,\u201d Vachris said at The Economic Club of Chicago earlier this month. \u201cThose employees who were doing those tasks before have now elevated up to more of a forward-thinking role.\u201d<\/p>\n
That doesn\u2019t mean Costco is resisting tech innovation. The retailer, which employs more than 341,000 people globally, has used AI to streamline operations across parts of the business, from pharmacy and gas stations to accounting and IT. But Vachris said the technology is overall intended to support employees, not eliminate the need for them.<\/p>\n
\u201cI don\u2019t see AI making choices on items for Costco,\u201d he added in the discussion, moderated by United Airlines President Brett Hart. \u201cI don\u2019t know that we\u2019ll ever take that out of the hands of a skilled buyer. AI won\u2019t be doing evaluations with our employees, but there is a great place for developing AI systems, and it\u2019s going to make us a better company.\u201d<\/p>\n
In many ways, that approach appears to be paying off financially. Costco shares are up roughly 17% this year, giving the retailer a market capitalization exceeding $440 billion.<\/p>\n
Costco has climbed to No. 12 on the Fortune 500\u2014with revenue just over $250 billion in 2025, more than Microsoft, Chevron, and General Motors. And as the company continues to double down on its signature $1.50 hot dogs and $5 rotisserie chickens\u2014plus humans at the cash register\u2014Costco\u2019s success is likely to continue.<\/p>\n
Costco\u2019s greatest long-term threat isn\u2019t AI\u2014it\u2019s \u2018losing our way\u2019<\/p>\n
Since its early roots in the 1970s, Costco has built a cult-like following among shoppers\u2014with its paid members rising to 81 million strong in 2025. But at a time when competition remains fierce, protecting that culture\u2014not necessarily keeping pace with AI\u2014is among Costco\u2019s greatest challenges.\u00a0<\/p>\n
When asked about the company\u2019s biggest threat, Vachris answered simply: \u201cUs losing our way.\u201d<\/p>\n
\u201cWe have to stay as focused as we were when we had 200 warehouses,\u201d he told Fortune in a 2024 company profile. \u201cWe can\u2019t become arrogant. We can\u2019t become comfortable.\u201d<\/p>\n
One area where Costco has remained steady is in its commitment to diversity, equity, and inclusion. As political pressure against DEI has intensified, many organizations quietly scaled back or abandoned their efforts. Costco has largely held the line, with Vachris and the company\u2019s board arguing that a diverse workforce and supplier base strengthens talent recruitment and innovation, according to reporting from The Wall Street Journal. Shareholders overwhelmingly rejected a proposal last year calling on Costco to evaluate risks tied to its DEI practices, with more than 98% of votes cast against it.<\/p>\n
The company\u2019s culture appears to resonate with employees, too. Costco has long boasted some of the strongest retention rates in retail: More than 55% of U.S. Costco employees have been with the company for more than five years, while roughly 23,000 employees have stayed for over 25 years.<\/p>\n
Fortune reached out to Costco for further comment.<\/p>\n
Like Costco, the CEOs of Delta and IBM are betting on human workers\u2014not tech replacement<\/p>\n
As companies like Meta, Amazon, and Microsoft have cut thousands of jobs in recent years, some business leaders, like at Costco, are pushing back on the idea that artificial intelligence should primarily be used to shrink workforces.\u00a0<\/p>\n
Delta Air Lines CEO Ed Bastian said he wants the technology to improve workers\u2019 jobs\u2014not eliminate them.<\/p>\n
\u201cI think it\u2019s a mistake to call anything artificial,\u201d Bastian told Fortune last month. \u201cYou want to scare people? Tell them that artificial intelligence is coming for you.\u201d\u00a0<\/p>\n
Instead, the Atlanta-based aviation company is focused on using AI to support workers as jobs evolve. Bastian added that business leaders need to lower the temperature around fears that AI will immediately replace workers.<\/p>\n
\u201cAt the end of the day, we know those job skills are going to change, as it always has,\u201d he added. \u201cBut one of the things with AI is it\u2019s changing more rapidly than people anticipate. And you\u2019ve got a lot of hype around it.\u201d<\/p>\n
IBM CEO Arvind Krishna has similarly cautioned against using AI as a reason to freeze hiring, particularly for entry-level workers.<\/p>\n
\u201cPeople are talking about either layoffs or freezing hiring, but I actually want to say that we are the opposite,\u201d Krishna told CNN in October. \u201cI expect we are probably going to hire more people out of college over the next 12 months than we have in the past few years, so you\u2019re going to see that.\u201d<\/p>\n
Still, the tension between AI optimism and workforce reductions remains difficult to ignore\u2014especially as tech companies in particular race to invest in innovation. Just a week after Krishna\u2019s comments, IBM announced plans to cut thousands of workers by the end of 2025 as it shifted focus to additional software and AI areas. A company spokesperson told Fortune at the time that the round of layoffs would impact a single-digit percentage of the company\u2019s total workforce, and when combined with new hiring, would leave IBM\u2019s U.S. headcount roughly flat.<\/p>\n
#Costco #CEO #Ron #Vachris #stealing #workers #jobsits #elevating<\/p>\n","protected":false},"excerpt":{"rendered":"
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