AS Watson Rejects AI Staff Cuts Across 17,000 Global Outlets
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AS Watson Group will not use artificial intelligence to cut its workforce across more than 17,000 stores in 31 markets, group chief executive Malina Ngai said in Macau.
The Hong Kong-based retailer is the world’s largest health and beauty chain by store count. It is steering automation toward floor assistance and warehouse ergonomics rather than headcount reductions.
Speaking at the Fortune Leaders Forum, Ngai said the business rolled out a human-AI partnership model last October. The system pairs floor staff with digital assistants to handle routine lookups and operational tasks. That frees employees for direct customer service. Management tracks progress through internal engagement scores and customer feedback rather than labor cost cuts.
Automation Shifts Warehouse Labor in Foshan
The technology is already altering logistics on the ground. At a group distribution warehouse in Foshan, 120 kilometers from Hong Kong, heavy-lifting robotics changed site demographics. Women now make up 62 per cent of the facility’s workforce. Across the wider region, men typically hold 80 per cent of manual handling roles.
Asian retail operators face a split in automation strategies. Western corporations and technology vendors eliminated thousands of administrative roles this year. Store-heavy pharmacy and beauty chains, however, rely on physical interactions to drive basket sizes. Cutting floor staff risks service margins in dense Asian shopping hubs, where personal consultations secure higher-value skincare sales.
Dual Listing Plans Anchor Network Scale
Parent conglomerate CK Hutchison is preparing the retail division for public markets. Reports indicate the group is planning a dual listing in Hong Kong and London. The deal could value AS Watson at approximately $30 billion.
“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?”
Founded as a Hong Kong pharmacy in 1841, the company expanded through European acquisitions and store openings across Asia. Ngai previously led digital and e-commerce integration, building the foundation for the current store-assist tools.
Landlords and investors are watching whether these productivity gains lift sales per square meter in core Asian markets as the float approaches.
Questions & Answers
Q.How is AS Watson utilising AI if not for reducing staff numbers?
How is AS Watson utilising AI if not for reducing staff numbers?
AS Watson is using AI to create a human-AI partnership model, pairing floor staff with digital assistants. This system handles routine lookups and operational tasks, freeing employees for direct customer service in its 17,000 global outlets.
Q.What impact has automation had on the workforce demographics in AS Watson's distribution centres?
What impact has automation had on the workforce demographics in AS Watson's distribution centres?
At a distribution warehouse in Foshan, heavy-lifting robotics have changed the site demographics. Women now constitute 62 per cent of the facility’s workforce, a significant shift from the typical 80 per cent male presence in manual handling roles across the region.
Q.Why are store-heavy pharmacy and beauty chains hesitant to cut floor staff in Asia?
Why are store-heavy pharmacy and beauty chains hesitant to cut floor staff in Asia?
These chains rely on physical interactions to drive sales, especially in dense Asian shopping hubs. Cutting floor staff risks service margins, as personal consultations are crucial for securing higher-value skincare sales and customer engagement.
Q.What are AS Watson's plans for its future ownership or public status?
What are AS Watson's plans for its future ownership or public status?
Parent conglomerate CK Hutchison is preparing the retail division for public markets. Reports indicate the group is planning a dual listing in Hong Kong and London, which could value AS Watson at approximately $30 billion.
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