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Resignations, layoffs, and labor instability: How automation helps CPG manufacturers stay ahead

Spoiler Alert
Spoiler Alert


The labor market has been affected by numerous layoffs in recent months and while technology companies have grabbed most of the headlines, the food industry has also been impacted. According to a recent article by Food Navigator, major companies such as PepsiCo, Coca-Cola, General Mills, Walmart, and others have announced layoffs. Due to inflation and the high cost of groceries, CPG manufacturers are passing on price increases to their consumers or cutting costs by laying off select staff. These layoffs have a significant impact on the economy and the job market, as many workers are left without a source of income.

In addition to the food industry, other sectors have also seen a rise in layoffs. According to an article by the Wall Street Journal, the current state of layoffs reflects the power dynamic in the workplace, with companies taking advantage of the labor market and using layoffs as a tool for cost-cutting and restructuring.

Automation as a necessary tool

It is becoming increasingly important for manufacturers to adopt digital and automated processes to ensure the smooth running of their operations in the face of high turnovers, layoffs, and movements such as the Great Resignation. For example, last year a UiPath survey found that 83% of employees had to take up to six new responsibilities outside of their job description due to coworkers leaving. The majority of these respondents agreed that most of their day is taking care of monotonous tasks that could be automated.

The use of technology and automation in the workplace has numerous benefits. For starters, digitizing and automating processes can provide a single source of truth and resources, helping businesses maintain continuity and efficiency even during layoffs. This can help mitigate the impact of layoffs on operations and create a more stable and secure environment for their workers. This is also beneficial to hard code any institutional knowledge when employees are preparing to retire.

Additionally, automation software can help improve visibility and transparency throughout the supply chain. With real-time data, companies can better track the movement of goods, identify bottlenecks, and respond to issues as they arise. The increased visibility can also help to reduce the risk of waste and minimize the impact of unexpected events such as natural disasters or pandemics.

Automation helps to streamline processes, reduce human error, and increase efficiency, which can help to mitigate the impact of supply chain disruptions. Companies can make informed decisions about their supply chain and respond quickly to changing conditions with the availability of advanced analytics and embedded reports. For example, automation can help to manage the sales of excess or discontinued stock, which can help manufacturers reduce financial losses.

Overall, with the labor market being generally unstable, automation brings stability and peace of mind for businesses and workers alike.

Transparency around automation implementation

The implementation of automation software is becoming increasingly important for companies to stay resilient in an uncertain supply chain. However, as automation becomes more widespread in the workplace, it’s essential for leadership to be transparent about their automation strategies. This allows employees to be prepared for the changes that automation may bring, and to understand how it will impact their job roles. The topic should be approached with openness and engaging in an ongoing dialogue can help dispel any misunderstandings or concerns employees have about automation and create a sense of trust and collaboration between leadership and employees.

It’s also important for leadership to emphasize that automation is not meant to replace workers, but rather to augment their skills and make their jobs easier and more efficient. By using automation to enhance the work environment, businesses can become more productive and competitive, and employees can take on more challenging and rewarding tasks while removing repetitive tasks. Food Logistics stresses the importance of addressing the human dimensions of technology, “leaders need to help workers prepare for new technology that may make day-to-day activities obsolete but will free them up for more strategic activities and decision-making. One of the ways to foster engagement and buy-in is to use technology to drive visible action.” In fact, a survey by UiPath found that 71% of employees agreed they could focus less on mundane tasks and more on creative work with the help of automation.

By providing employees with the training and support they need to thrive in an automated workplace, businesses can create a positive and dynamic work environment that benefits both employees and the company.

Automation ≄ layoffs

It’s a common misconception that automation will inevitably lead to layoffs, but this is not necessarily the case. In fact, Forbes found that automation creates more jobs than it destroys and is an important tool for all manufacturing businesses. 

Companies have the option to retrain their employees, so that they can learn new skills and continue to contribute to the company’s success. A great example of this is AT&T, which in 2013 decided to retrain 100,000 employees who were in jobs that would become irrelevant in a decade, instead of laying them off. 

AT&T’s decision has proven to be a wise one, with the company seeing an increase in revenue by 27% since 2013 and making Fortune’s 100 Best Companies to Work For list for the first time in 2017.

In addition to retraining, which helps keep employee skills up to date, there are several other options that leaders have besides layoffs when implementing more automation, such as creating or offering new positions, implementing flexible work arrangements, offering early retirement packages, and reallocating employees to new roles.

In conclusion, the current state of layoffs is a concerning trend that has a significant impact on the economy and workers. To mitigate the impact of layoffs, manufacturers need to adopt digital and automated processes to ensure that their operations run smoothly and efficiently. By doing so, they can create a more stable and secure environment for their workers, and help ensure the success of their business even during challenging times.


Find out how automating your closeout program can generate value for your business by downloading our research report, Technological maturity in the secondary CPG market.

Topics: liquidation, supply chain