Retailers are quietly replacing workers with AI, and here are the jobs that are disappearing first

While CEOs of major companies like Amazon (AMZN) have warned that artificial intelligence (AI) could lead to future job losses, Federal Reserve Governor Christopher J. Waller recently suggested that outcome has already been reached. Some workers in customer support and administrative areas are being replaced by artificial intelligence instead of humans.

“Retailers in particular are cutting back on hiring in call centers and IT-related professions,” Waller said Oct. 15 at D.C. FinTech Week. “So far, most say this is being dealt with through attrition, but a number of retailers say there is potential for downsizing next year.”

Although AI has not yet had a widespread impact on the labor market, Waller noted that companies are starting to prepare for the potential transformative effects of the new technology.

“AI is impacting hiring at these companies, as some have reduced hiring because of AI, while others have added workers who are adept at using it,” Waller said.

Klarna, a buy-now-pay-later company, announced it has used artificial intelligence to do the work of 700 customer service agents. However, CEO Sebastian Siemiatkowski reversed course, admitting that human customer support is still essential.

“Because cost unfortunately was a very dominant evaluation factor when organizing this, what you end up with is lower quality,” Siemiatkovsky told Bloomberg in May 2025. “Really investing in the quality of human support is the way of the future for us.”

Waller is optimistic about the potential of AI and its impact on the economy — even if it results in job losses for some workers.

“AI is moving faster than previous waves of innovation…The challenge is to keep up with the pace – to help workers and businesses adapt so that gains in efficiency translate into higher real wages and sustainable growth throughout the economy,” Waller said. For policymakers, we must allow disruption to occur and trust that the long-term benefits will outweigh any near-term costs.