What Retail CHROs are Doing About AI, Skills, and the Future of Work
I recently moderated a CHRO panel in Seattle featuring leaders from Costco, Starbucks, and Nordstrom, three iconic retailers with very different models, but a shared reality: their workforce is overwhelmingly frontline, customer-facing, and human-centered by design.
The conversation was framed around i4cp’s 2026 Priorities & Predictions research, specifically these four overall market predictions:
1. Companies increasingly use AI-driven layoffs as a strategic lever
2. Skills become the new operating system of work
3. Digital work twins won’t seem like science fiction
4. Workforce design becomes more fluid and adaptive
But what stood out was how consistently the CHROs pointed to a deeper truth: the future of work isn’t being driven just by tech headlines, but is being built through execution discipline, governance, and culture.
AI hasn’t driven layoffs in retail—but it is beginning to reshape work in the sector
One of our most debated predictions is that companies will increasingly use AI-driven layoffs as a strategic lever. While many large enterprises are now more openly talking about workforce reduction as a deliberate outcome of AI adoption, none of the panelists’ organizations have used AI to eliminate roles. Workforce reductions, where they occurred, were driven by strategy shifts or organizational simplification, not AI integration. That said, AI is beginning to change how work gets done in high-volume, hourly workforce environments.
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At Nordstrom, a virtual agent now handles high-volume, low-complexity service tasks like order status and returns. As CHRO Lisa Price shared, the goal is twofold: reduce customer friction and free up human agents for nuanced interactions. Starbucks echoed this at scale. Tools like Green Dot Assist help store partners access information in the flow of work, designed to enable more human connection, not replace it. As Starbucks CHRO Sara Kelly put it, “Humans own the work. AI is enhancing the work.” Across all three companies, AI is viewed as a productivity multiplier, not a headcount reducer.
Skills matter but pragmatism rules
One of the predictions that resonated with the entire group was i4cp’s prediction that skills will become the operating system of work. Our recent study on Skills-Based Talent Practices found that only 12% of large organizations report systematic effort and sustained investment in skills-based practices, while 44% remain in the planning or pilot stage. The CHROs agreed: this is a journey, not a checkbox.
At Costco, the priority is leadership capability, especially with an aging workforce and expansion underway. Brenda Weber shared that their new Leadership Academy uses simulations designed for operational environments to develop frontline managers. Nordstrom is co-creating shared skills profiles with other employers and focusing internally on five critical career pathways where demand is highest. Starbucks is cataloging skills role by role while aiming to fill 90% of retail leadership positions internally within three years. AI is already supporting high-volume hiring, especially where prior experience isn’t required. The common thread? No one is “boiling the ocean.” Skills strategies are anchored in clear needs and operational realities.
Explore i4cp’s AI Case Studies in Hiring.
Digital work twins? Not so fast
The prediction that generated the most unease among our panel was that digital work twins, or AI tools that can own tasks end-to-end and simulate or execute work on someone’s behalf, will no longer sound like science fiction.
All three CHROs expressed deep hesitation, especially for judgment-driven, people-centric roles. As Brenda Weber of Costco put it, “If it misses the nuance and gives the wrong advice, I don’t get to blame my twin.” Still, AI is being used for preparation and simulation, from interview screening to board Q&A rehearsal. The line is clear: AI can assist, but accountability stays with the human.
An adaptive workforce is about governance, not gigs
Our fourth prediction focuses on fluid, modular, adaptive workforce design. In practice, the panel made clear that this looks far less like an internal gig economy and far more like tight prioritization, clear governance, and faster decision-making.
Starbucks shared perhaps the most explicit example, describing how they reduced more than a thousand active initiatives down to a single-page set of priorities, supported by weekly governance forums and CEO-level oversight. No project gets resourced without passing through that system. Nordstrom is testing “micro-squads” in tech—small, AI-augmented teams to accelerate development. Costco, meanwhile, leans on informal flexibility: managers shift or share talent based on capability rather than title. Different approaches, same principle: agility comes from clarity, not chaos.
Culture is the force multiplier
One theme ran through every topic—AI, skills, org design, compensation: culture. Each CHRO emphasized that values, leadership behavior, and trust are what enable real change. Sara Kelly put it simply: “If you stay true to your mission and values, you can navigate a lot of change. When companies don’t, that’s when it breaks.” This echoes our extensive research on culture: technology may accelerate change, but culture determines whether it sticks.
Future readiness hinges on a change-ready culture. Read i4cp's latest research.
Bold leadership in a brave new world
For large retailers, and other industries with hourly, customer-facing workforces, the future of work isn’t being driven by bold declarations or the latest buzz. It’s being methodically built through prioritization, discipline, governance, skill-building, and values-led leadership. It’s being built by bold leaders like these. In organizations where the human experience is the product, that bold leadership may be the most important success factor!
