The CEO of the world’s largest health and beauty retailer is pushing back against using AI to shrink headcount, arguing that the technology should be used to upgrade human work instead of replacing it.
“Is it really that, with AI, we’re going to cut out 30% of our workforce? Or… are we going to increase the quality of our people’s intelligence?” Malina Ngai, Group CEO of AS Watson, said at the Fortune Leaders Forum on Sept. 8.
Companies, particularly in the tech sector, have laid off tens of thousands of employees this year as they pivot towards AI. Oracle, for example, cut 21,000 jobs, or roughly 13% of its workforce, over the past year.
Instead, Ngai—who previously led AS Watson’s digital transformation and expansion of its online commerce offerings—argued the retailer is pushing a “human-AI partnership” strategy.
“You should bring the AI assistant with you to work. It helps you to think faster and smarter,” she said.
Since the strategy launched last October, employee engagement scores have “jumped up a lot,” she said, as staff spend more time in face-to-face interactions rather than facing a screen. The company pairs that with a “customer love score” which Ngai said keeps rising as store staff are freed to serve customers. “This is not the usual way that people would measure AI,” she acknowledged.
Ngai argued AI is an opportunity to change how retail itself works. “It’s the first time we are able to look into how we reinvent the model so that we don’t just focus on processes,” she said. “Going forward, I think retail is going to become more human, not less.”
Her thoughts are echoed by others in the retail sector: In May, Costco CEO Ron Vachris insisted that AI was “elevating” workers.
Founded in 1841 as a pharmacy in the then-British colony of Hong Kong, the company now encompasses over 17,000 outlets across 31 different markets, making it the world’s largest health and beauty retailer by store count. The Hong Kong conglomerate is reportedly planning to list the unit in both Hong Kong and London, with reports suggesting a valuation of around $30 billion.
Greater automation is changing AS Watson in surprising ways, too. Ngai recounted a visit two months ago to a warehouse in Foshan, about 120 kilometers from Hong Kong. In a typical warehouse, some 80% of workers are men because of the heavy lifting. With robots now doing that work, 62% of the workforce at the Foshan site is female.
“That was something that really positively surprised me—how technology can also bring more diversity in the company,” Ngai said.
The warehouse points to her bigger argument: AI reshapes a business when it’s used to rethink old assumptions, not just to speed up what’s already being done.
“The biggest risk for all leaders with this type of AI technology is: We [use] AI to improve today’s processes,” she warned. “Basically, you get a version of yesterday.”