Will Avatars Turn Employees Into Surrogates In An AI Workforce?
I've been playing around with a few online platforms that let you create an avatar of yourself that looks and sounds a lot like you. The one I tried most recently, VEED.IO, created a version of me where the mouth movements didn't quite match how I normally speak. It was basically my face, but the way the mouth moved gave it away. The voice was close, but not exact. Still, it reminded me of the Bruce Willis movie Surrogates. That film showed a world where people stayed home while sending robotic versions of themselves out to live their lives. We already have filters on Zoom that make us look less tired or smooth out a few wrinkles. But creating a video presence that speaks for us without us actually being there feels like a bigger shift. It raises some real questions, especially now that companies are experimenting with AI workforce tools that blur the line between showing up digitally and showing up in person.
How AI Workforce Technology Is Changing The Way Employees Show Up
Several platforms are pushing the limits of what is possible with AI avatars. With just a few clicks, someone can create a professional video of themselves delivering a message, hosting a training session, or participating in a meeting without ever being live. The message they deliver comes from a script that is just copied and pasted into the software, and then the avatar reads it. It's not unlike a video I saw of a complete standup routine that imitated George Carlin's voice and his style. His estate sued for that creation, but it's a different situation when we create avatars of ourselves.
It is easy to see the appeal. No more rushing to get camera ready for Zoom calls. No more worrying about lighting, background noise, or even your energy level. As AI workforce options expand, it becomes tempting to wonder if showing up personally is even necessary in every situation.
Why AI Workforce Solutions Are Appealing In A Remote Work Era
Remote work is not going away. In fact, many companies are embracing it more fully than ever. AI workforce solutions offer a way to stay visible and productive without the constant drain of live video appearances.
There are practical benefits. Employees who feel uncomfortable on camera might feel more confident sending an avatar. Teams can create consistent training content without repeating themselves. Leaders can appear across multiple meetings at once without ever leaving their office.
In a way, the rise of AI workforce tools feels like a natural next step in a world that is already blending digital and human experiences.
What AI Workforce Trends Could Mean For Trust And Authenticity
Even though the technology is impressive, it raises real questions about authenticity. If an AI avatar shows up for a meeting or delivers a message, how can you be sure the real person was involved?
In education, although not allowed, there have already been examples of online professors hiring others to teach courses under their names. Imagine how easy it would be to use AI workforce avatars to replicate a presence without any personal involvement.
How much trust might erode if we cannot tell whether we are interacting with a real colleague or just their digital twin.
How AI Workforce Innovations Raise New Questions About Responsibility
There is also the issue of responsibility. If an AI avatar says something inaccurate, misleading, or even offensive, who is accountable? Is it the employee, the company, or the technology provider?
As AI workforce innovations become more common, the lines could blur quickly. In fields like customer service, sales, and leadership communication, getting it wrong could have serious consequences.
The legal system has not fully caught up yet, leaving a lot of gray areas around what happens when avatars act on someone else's behalf. In the Carlin case, the lawsuit ended in a settlement, and the creators agreed to remove the content and stop using his likeness. It set an early precedent, but when people start creating avatars of themselves for work, it opens up a whole different category of questions the courts still haven't addressed.
Are AI Workforce Avatars Making Human Connection Harder To Build?
One thing to consider is the role imperfection plays in building trust. Live conversations are messy. People pause, stumble over words, laugh at unexpected moments, and show real emotion. Those small signs of humanity are part of what helps us connect.
If AI workforce avatars start replacing more human interactions, will we lose something important? A perfectly polished video presentation can deliver information, but can it create real relationships?
It is an open question, but it seems worth considering before we trade too much authenticity for convenience.
Real Companies Are Already Using AI Workforce Avatars
This may still feel futuristic, but some companies are already using AI avatars for real work. Synthesia is used by more than half of the Fortune 100, mostly for training videos and internal updates. BESTSELLER, a global fashion company, uses it to reach thousands of employees while cutting back on classroom time.
Other platforms like Hour One and Colossyan are being used to speed up everything from compliance videos to investor updates. Companies like HP, BMW, and Vodafone are already exploring these tools. Most current examples focus on communication and training, but with this kind of momentum, it's not hard to imagine how quickly that could expand into meetings, customer service, or even leadership messaging.
Even Zoom is experimenting with AI avatars. They are working on photorealistic avatar options that would let you record messages or participate in meetings asynchronously, which is something that takes all this to another level.
We are not talking about future tech anymore. These tools are here, and companies are already testing how far they can go.
What Companies Can Do To Prepare Now For An AI Workforce
Whether or not companies adopt AI avatars this year, it makes sense to start talking about what this kind of presence means. Is it okay to use an avatar in a team meeting? When is live participation required? What kind of training should be offered to help people use these tools responsibly?
Companies that begin defining expectations now will be in a better position later. It is easier to build trust when people know the rules and understand how these new tools fit into workplace culture.
Final Thoughts On Where The AI Workforce Might Take Us
The idea of outsourcing our real selves to technology is no longer just a movie plot. As AI workforce tools become more advanced and accessible, they are shaping the way businesses operate and how people show up professionally. There is no clear roadmap yet. Some companies will likely embrace AI workforce avatars quickly. Others will move more cautiously, trying to protect human connection wherever possible. As exciting as the technology is, I keep coming back to the same feeling I had when I first saw Surrogates. Just because we can send a version of ourselves into the world does not mean we always should. Maybe the real question is not whether avatars will become part of the AI workforce. It is how much of ourselves we are willing to hand over to them.
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Business Insider
3 days ago
- Business Insider
I tried Tesla's new Robotaxi. Here's what it got right (and wrong).
This week, I flew to Austin to do what only a few have been able to: ride in Tesla's Robotaxis. I took five trips that my rider companion and I found mostly smooth, but there were some bumps. We encountered three issues, including one in which the Robotaxi began to drive the wrong way onto an empty one-way street clearly marked with "Do Not Enter" signs. Since the end of June, Tesla has been testing Robotaxi, the company's autonomous ride-hailing service. Musk has said that Robotaxi is part of Tesla's road map to becoming a full-fledged AI and robotics company. The service is still in its early stages. A limited number of autonomous Model Ys navigate Austin roads, and a safety operator sits in on every ride. A small group of people has been given early access to the service, including Vu Kong, an Austin resident who manages a dental group and invests in Tesla on the side. Kong seems to be one of the few Robotaxi invitees who aren't Tesla or EV influencers with a large social media presence. He told me he got access about a week after the Robotaxi launch by signing up on the company website. "I was pretty impressed about how consistent the rides were," Kong said after seven trips. "They were all pretty smooth, and I felt safe in all of them. By the third time, I just forgot I was in an autonomous car. I was doing meetings in the car, taking phone calls, and doing Zoom calls." I took two half-hour rides and three shorter rides with Kong. Pick-up times weren't always consistent, and the app had a few glitchy moments. In Downtown Austin, Tesla will be going up against pick-up times of less than 10 minutes and relatively low prices from Uber, which manages Alphabet's Waymo fleet. A spokesperson for Tesla and a few employees on Tesla's Robotaxi team BI reached out to did not respond to a request for comment. Here's what I saw. A confident Tesla First, the new 2025 Tesla Model Y feels great. I always appreciate how spacious Teslas feel, thanks to the glass roof that allows light to enter the cabin. The seats are comfortable enough, but I wondered why Tesla would go with bright white seats for cars that will presumably be taking on a lot of passengers. The seats are leather, so maybe they'll be easy to maintain. Throughout the rides, I saw an autonomous driving system that can be safe and confident in its maneuvers. Tesla's Robotaxi, unlike its competitors, relies only on external cameras and neural networks to navigate its environment. Our car maintained a safe distance with a cyclist, recognized construction zones that are rampant in Austin, and could judge when to make turns while there was oncoming traffic. Human interventions Despite the mostly smooth experience, I encountered a few disengagements — moments when the safety operator inside the car or a remote support agent had to intervene. Two of the Robotaxi disengagements occurred on the very first route, which we began at around 7 a.m. on Wednesday at Summer Moon Coffee, an Austin-based café chain. At the start, when the Robotaxi was attempting to pull out of the parking lot, a message appeared on the console screen: "Our team has identified an issue and is working to resolve it." A remote "support agent" connected with us: "It looks like the vehicle isn't making any progress. Is everything OK?" In-car safety operators hired by Tesla largely avoid interacting with riders. When the remote agent asked us the question, the operator quietly turned to us and nodded his head, nudging us to talk. It was unclear what caused the Robotaxi to be stuck. There were no oncoming cars and the roads were quiet. After the support agent said they would help, the steering wheel came back to life and made a jerky movement. The Robotaxi inched forward and slammed on the brakes. It's unclear how much control Tesla's remote team had over the vehicle. The Robotaxi pulled out of the parking lot and began its route. The second disengagement came 20 minutes into the ride, when Kong changed the route to return to his office. The safety operator inside the car touched the screen to pause the ride. While I was talking, I hadn't noticed the Robotaxi begin to head the wrong way down an empty, one-way road marked with two signs that said "Do Not Enter." The safety operator did not talk to us. When Kong pressed "Resume Ride," the operator immediately stopped the car again. That's when we realized we were supposed to wait for another remote support agent, who quickly helped us. The Robotaxi made a three-point turn to get back in the right direction. The last disengagement came during my fourth Robotaxi ride on a late Thursday morning. Kong and I wanted to go to the very tip of the phallic-shaped service area Tesla unveiled earlier this week. The Robotaxi app allowed us to put in a destination that was just outside of the service area — a Summer Moon Coffee location in North Austin. The app indicated that the vehicle would drop us off close to the destination, requiring a 10-minute walk the rest of the way. As we approached our destination, Kong changed the route to another location that was within the geofence. The Robotaxi put us on a route that would take the vehicle just outside of the service area for a brief moment in order to head to our new destination. The vehicle soon pulled over, and another remote support agent got in touch with us. "I just wanted to let you know it was routing a little bit outside of our range, so we just changed the route so that it wouldn't go outside our fence," the agent said. At no point did I feel the Tesla Robotaxi put us in danger. It was interesting to see the system's limits. Other Robotaxi limits Pick-up times for the most part were under 10 minutes. On Wednesday afternoon, the Robotaxi app gave us a nearly 30-minute pick-up time for a 20-minute ride. The app showed that a Robotaxi was picking us up from the northern part of the new service area. It was the same Robotaxi we had for the first ride that morning, based on the matching license plate. Kong attempted to find another car with a shorter pick-up time to no avail. It also appears that Tesla's Robotaxis are avoiding the highway. During our fourth ride to North Austin in the upper part of the service area, Kong, who has lived in the city for five years, said the Robotaxi was taking a longer route to a destination that should be about an 18-minute trip. "Normally we'd take the highway to get there," he said. Musk has long pitched an autonomous car that is generalizable — meaning the vehicle could handle any environment, including highways, with few operational limits and without the need to map a region before deployment. The AI driver is trained on large amounts of data, so, in theory, it should be able to drive the same way a human driver can go through unfamiliar areas. It's unclear why the Tesla Robotaxi avoided the highway. Tesla's FSD (Supervised) handled San Francisco's highway flawlessly in BI's last test. Kong added that the drop-off location could be improved so that the Robotaxi is closer to the actual destination. In terms of the app experience, Kong told me that it can be a bit buggy. We saw one moment when the app showed that a car was arriving in 29 minutes, even though we had just ended our ride and did not order another Robotaxi. A work in progress My colleagues and I at BI have closely reported on the robotaxi race, the efforts Tesla has made to push out an autonomous driver system, and the bold promises Musk has made around self-driving cars and artificial intelligence. I've also compared Tesla's Full Self-Driving (Supervised), the EV company's advanced driver-assistance system, to Waymo with my colleague Alistair Barr. I walked away impressed that FSD could navigate San Francisco roads and highways using only cameras, but saw a critical error after the Tesla ran a red light. My expectations for the Tesla Robotaxi were high — I expected quiet, uneventful rides — but I also suspected that it would probably not be perfect. The company has indicated that the Austin service is a "pilot launch." Safety operators are inside the vehicle, access is limited to invitees, and the company is charging a flat fee of $6.90 per ride. Waymo began testing its own robotaxi service with an early-access program in California in 2021. That year, the company reported 300 disengagements to the California Department of Motor Vehicles. In 2024, when Waymo opened up to the San Francisco public, the company reported about 245 disengagements in the state. Waymo also says it's now providing over 250,000 paid rides a week. Tesla could get there. It just needs to start by conquering Austin.
Hamilton Spectator
4 days ago
- Hamilton Spectator
Inside the death of Hudson's Bay. Why former senior employees believe leader Richard Baker should take the blame
When Hudson's Bay employees joined a company-wide Zoom meeting on March 8, 2021, they found their chairman, Richard Baker, wearing a camouflage T-shirt and seated in what appeared to be a boat cabin, accompanied by two tiny dogs. The unmistakable theme from 'Game of Thrones' played through the speakers as Baker unmuted himself. 'We are at war,' employees recall him saying. 'And we are going to win. We will crush the competition.' Baker was boasting about a deal he had just struck at Hudson's Bay's sister company, Saks Fifth Avenue. He had spun off into a separate company and sold a stake in it for $500 million — a 'war chest,' he said at the meeting, to fuel his push for dominance in U.S. luxury retail. Five months later, Baker, head of U.S. private equity firm NRDC Equity Partners, which bought Hudson's Bay in 2008, sought to replicate the move in Canada, separating the ' from its brick-and-mortar operations and pouring millions of dollars into online expansion. But this time, no investors were interested. The Bay's big shift to e-commerce — which some say came at the expense of the struggling physical stores — became the 355-year-old company's final gamble. In March of this year, the retailer, which is older than Canada, filed for creditor protection to explore restructuring avenues. Three months later, it shut its doors for good. Hudson's Bay completed the liquidation of its more than 80 stores and closed its doors for good on June 1, after failing to find restructuring solutions to save any part of its remaining business. Many department store chains have disappeared from Canada before Hudson's Bay — Simpsons, Eaton's, Sears Canada and Nordstrom Canada — so it's hard not to see the end of the Hudson's Bay chain as confirmation of a broader truth: that multi-storey department stores are relics of a bygone era, doomed to fail in the age of digital retail. Two company executives agree, telling the Star the COVID-19 pandemic was a death knell for the retailer and that Baker did all he could to keep the company afloat in a difficult market. The blame, they stress, shouldn't fall on him, as decisions were made collectively by management and the board of directors. But many others aren't convinced. A dozen former high-level employees, who are among the 20 people the Star interviewed for this story, believe Baker is responsible for the Canadian retail giant's loss of brand identity and its ultimate decline. (The Star is not naming some of the employees because they are bound by exit agreements or face potential retaliation.) Dean Melville, a planning manager who worked for Hudson's Bay for 15 years, said the influence of U.S.-based leadership eroded the company's ability to fine-tune its merchandising and pricing strategy, leading to shrinking margins and a steady decline from the early successes of the 2010s. 'We had to make business decisions day in and day out,' he said. 'But (Baker) ultimately was the one controlling the money, controlling where the authority was.' Dean Melville, a planning manager who worked for Hudson's Bay for 15 years, watched the historic department store shift throughout the 2010s from a hub of fashionable labels to being viewed as a mid-tier to clearance-level department store. While acknowledging the pandemic's heavy toll on brick-and-mortar retail, some former employees argue that Baker's missteps in managing real estate and store operations sealed the company's fate. They say the collapse was already in motion before the pandemic hit. Baker was too focused on expanding his retail empire outside of Canada, the company's resources were stretched too thin, its brand identity was eroding and its ability to keep pace with an evolving retail landscape was steadily weakening. (Baker and his current team would not make themselves available to be interviewed for this story and did not respond to detailed questions sent by email.) Now the true scope of the crisis has been revealed to Canadians. It's still hard to believe that a company so deeply tied to the country's founding — rooted in the fur trade, and later a pillar of modern consumer life — is gone, and that the man who steered it there is walking away, seemingly unscathed. 'Did the Bay stores lose their uniqueness? Yes. Did they stop servicing the customer effectively? Yes,' said Evelyn Reynolds, who served as the senior vice-president of Hudson's Bay between 2009 and 2018. 'But many of those things were self-inflicted. They were not just a function of outside forces.' *** On the morning of March 10, 2025, thousands of Hudson's Bay employees across Canada, who would lose their jobs without severance pay in the following months, were summoned to a hastily arranged town hall. Three days earlier, they had learned — through news headlines — that the company had filed for creditor protection. Liz Rodbell, the retailer's president and CEO, appeared on screen from Toronto, her voice trembling as she explained the upcoming legal proceedings, a process that ultimately failed to save any of its more than 80 stores, despite a last-minute search for buyers and investors. No questions were asked by the shocked employees and the meeting ended quietly and abruptly after just five minutes. As sudden as the news was, there were many warning signs in the five years leading up to the Bay's demise. In 2020, after reporting losses in 12 of its last 15 quarters, Baker delisted Hudson's Bay Company (HBC) from the Toronto Stock Exchange. At the time, HBC was the parent company to not only its namesake retailer, but also U.S. luxury brand Saks Fifth Avenue and its off-price cousin, Saks Off 5th. Last December, as Baker acquired long-coveted American department store Neiman Marcus and consolidated his U.S. holdings under a new entity, Saks Global, Hudson's Bay was cut loose to operate independently with a balance sheet of its own. The chairman assured employees that the split would make the Canadian business leaner and more appealing to investors. But three months later, the company came to court with a different message: It had just $3 million in cash and more than $1 billion in debt, citing difficulties in securing financing due in part to U.S. President Donald Trump's trade war. One undisputed fact is that the pandemic, which hit just a week after the company was taken private, delivered a blow that would hobble it for years to come. Across the country, more than 80 Hudson's Bay stores — responsible for 80 per cent of the company's revenue (20 per cent came from online sales) — were brought to a standstill. The COVID-19 pandemic hit Hudson's Bay just a week after the company was taken private and brought its brick-and-mortar stores to a standstill. When their doors reopened, the landscape had shifted and the stores had shortened hours and a customer base that had vanished from the heart of the city as people shifted to working from home. When their doors reopened, the landscape had shifted and the stores had shortened hours, sealed fitting rooms and a customer base that had vanished from the heart of the city as people shifted to working from home. But some high-level employees say it was the decisions Baker made next that brought the company to its knees. According to court filings, in 2021 and 2022, the company poured $130 million into e-commerce infrastructure, logistics and marketing, and hired more than 500 employees. The centrepiece of that investment was Marketplace, a new digital platform modelled after Amazon, where third-party suppliers could sell merchandise directly to customers. While scaling up e-commerce amid plummeting in-store sales was a natural move, some former executives told the Star that they believe Baker went too far, as money flowed almost entirely into the online business, leaving its physical stores behind. 'The corporate strategy was that we could become the Amazon of Canada. The only problem with that strategy is that there actually is an Amazon in Canada,' said Patrick Dickinson, former senior vice-president of marketing, who left the company in 2019. He added that the goal was unrealistic because a truly competitive digital marketplace required far more funding than the company had. 'The survivors (in retail) never stop realizing that while everyone's online, your store base can actually differentiate you. So you need to make that like a showcase,' he said. In hindsight, some former executives say they believe the pivotal misstep was Baker's decision in 2021 to spin off Hudson's Bay's e-commerce division into a separate company from its physical stores. They said the split drove up infrastructure and labour costs by requiring two leadership teams and separate supplier contracts, which undermined economies of scale. 'That was a completely stupid strategy whose only motivation appears to have been to raise cash. Of course, it failed. Then he smashed the two back together,' said Mark Cohen, former CEO of Sears Canada. Meanwhile, rather than focusing on improving in-store sales, former employees say the company invested significant labour and money into pilot ventures that never came to fruition: a six-month trial of a laundry pickup and delivery service in the GTA, as well as a product line called 'Essentials,' aimed at competing with Walmart and Loblaw in the household goods market. Elliot Grundmanis, chief financial officer of Hudson's Bay from 2020 to 2022, has a different perspective on the decision to split the company. He told the Star the leadership team spun off the digital business because during the pandemic no global investor would invest in it while it was still tied to the physical business. The strategy did bring capital to Saks businesses, but Hudson's Bay was 'a little late' to the game, he said, as valuations of publicly listed online retailers had already begun to decline. 'The structure was essentially recombined at the end of 2022, and any temporary disruption was well worth the risk we had to take at that time to try and help the business survive in what was a rapidly changing environment,' he said. Despite major improvements to its e-commerce site, Hudson's Bay's online sales turned out to be less profitable than in-store sales and failed to offset a sharp drop in store traffic. By 2023, corporate layoffs became routine, recurring every few months. A new ritual took shape: every week, senior executives and lawyers met with the company's chief financial officer to review the growing list of vendors owed payments that were months past due. Some had stopped shipping, others had filed lawsuits. These weekly meetings were convened to decide who to pay first. In the summer of 2024, HBC made headlines on both sides of the border, but for strikingly different reasons. South of the border, the company announced a blockbuster deal to acquire luxury retailer Neiman Marcus for more than $2.65 billion (U.S.). But back home in Canada, heat-stricken shoppers walked into their local Hudson's Bay store to find it just as stifling inside: elevators were out of service, air conditioning was broken, and staff were nowhere to be found. One source, who has knowledge of the matter but is not authorized to speak publicly, said Saks extended loans to Hudson's Bay in Canada — $287 million in 2022 and another $140 million in 2024 — to help pay vendors and replenish inventory. In 2023, an additional $200 million was publicly injected by the company's landlord, Cadillac Fairview. But several high-level employees told the Star they were baffled by where some outside funds — including more than $100 million from the 2024 sale of the Oakridge Centre lease in Vancouver — went, saying they saw no visible improvements in-store operations. 'We wouldn't be in this situation if there was an actual cash infusion of over $100 million late in the year. The speculation, but we're pretty good at this, is that this was used to close the Neiman Marcus deal,' said a former executive. *** Born into a real estate dynasty, Baker reportedly studied cooking in Paris after graduating from Cornell University, before being steered by his father toward the family business, NRDC. It was there that he began forging lucrative deals, selling shopping centre properties to Walmart — an experience that may have revealed to him the immense value of the real estate underlying the retail sector. In 2011, Baker demonstrated to the world exactly how he would unlock the latent value of Hudson's Bay when he sold off up to 220 Zellers leases to Target for a jaw-dropping $1.8 billion — $700 million more than the amount paid to acquire the whole department store just three years earlier. He also freed up $650 million by selling HBC's Queen Street flagship store in Toronto to Cadillac Fairview and leasing it back in 2014. The year after, he placed 10 Hudson's Bay properties into a joint venture with RioCan Real Estate Investment Trust — a deal that left the company paying higher rents to the newly formed entity, some executives told the Star. Baker's ambitions went beyond Canada. After taking Hudson's Bay public, he bought Saks in 2013 for $2.9 billion (U.S.), less than what Saks's sprawling Manhattan flagship was later determined to be worth, and two years after that, he acquired Germany's Galeria Kaufhof and its real estate for €2.8 billion. Being part of a crowded corporate family meant Hudson's Bay had to compete with its sibling brands for capital. At the start of 2016, according to the Financial Post, HBC planned to allocate the majority of its $750- to $850-million capital investments budget to store renovations and new locations — including a major overhaul of the Saks Fifth Avenue flagship in New York, an expansion of Hudson's Bay stores in Europe, and the opening of dozens of new Saks stores. Just $60 million was set aside for building a new e-commerce distribution centre in Scarborough. Richard Baker has embarked on a rapid string of acquisitions and real estate deals over the past 12 years, including the purchases of luxury retailer Saks, Germany's Galeria Kaufhof and U.S. department store Neiman Marcus. Canadian retail expert Doug Stephens describes Baker not as a retailer, but as a real estate investor who 'simply stripped Hudson's Bay of its assets, made money on it, and took the oldest retailer in North America, completely ruined it, and walked away.' Grundmanis, defending Baker, said the chairman 'did not receive or take any money out of the business, except as a public shareholder entitled to the same dividends as everyone else.' He added that Hudson's Bay received more than its 'fair share of capital' based on the real estate deals that were done and the needs of the business. But Baker's retail ventures fared far less successfully compared to real estate deals. Lord & Taylor, the iconic American department store he acquired in 2006, along with flash-sale site Gilt and its retail chains in Europe, reported prolonged declines in comparable sales, a key metric for store performance, before Gilt was sold in 2018 and the other retail chains in 2019. HBC's Canadian business experienced a period of strong growth under the five-year leadership of retail veteran Bonnie Brooks as president after 2008. But by 2018, its performance had noticeably deteriorated. Dickinson, a former executive who worked for the company for 13 years, said he believes Baker wanted to run a viable business, but was a victim of his early successes with Hudson's Bay, convinced he could easily replicate them elsewhere, without fully grasping that 'old houses' are costly to maintain. 'They ended up using their operational successes to fund corporate failures again and again and again,' Dickinson said, adding the budget for Canadian operations had shrunk so much over the years that it 'starved the business.' Under Brooks's leadership, Reynolds said Hudson's Bay offered a broad merchandise assortment across entry-level to mid-range to premium price points, but subsequent leaders brought varying market perspectives, causing the retailer to swing between heavy reliance on discounting and a more structured pricing architecture. (Hudson's Bay has gone through six presidents since Baker promoted Brooks to vice-chair in 2013. Brooks left the company in 2016.) 'If you asked me to sum it all up in three words. I'd say they lost their way,' Reynolds said. 'It confused the customer. It started to lose its identity.' Stephens said the retailer failed to invest enough in developing new strategies, attracting younger customers, and enhancing the shopping experience — and its pivot to e-commerce after 2020 came too late. Hudson's Bay, facing mounting financial pressure, shut down several stores in the wake of the pandemic, including its downtown Winnipeg location and the iconic Bloor and Yonge store in Toronto. According to two sources bound by exit agreements and not authorized to speak publicly, the company's executive committee had, over the past few years, recommended several proposals to close between 25 and 40 stores, which they hoped would help strengthen the company's financial position in the wake of the pandemic. But once the proposals reached the board of directors, Baker shot them down, even refusing to reduce the number of stores by simply letting leases expire. 'He's a real estate guy. The answer for him was never to close doors or give up real estate,' one source said. Grundmanis disagrees and said Baker and the board 'would have gladly approved' any initiative to drive profitability, but the company analysis at the time showed there was only potential to close or lease out space in three to five Hudson's Bay stores without incurring significant rental and other costs. A separate source said the board pursued another strategy instead: in December 2024, at the same time as the acquisition of Neiman Marcus, the credit lines for the U.S. and Canadian businesses were split with the goal of bringing in new financing to stabilize Hudson's Bay operations. But the plan ultimately failed as two groups of lenders who were ready to offer financing in December and January backed off after Trump's tariff threats. Grundmanis said the pandemic, along with Canada's ever-changing responses to it, was the biggest contributor to the company's challenging financial situation. Some retailers were deemed 'essential services' and were allowed to remain open during the pandemic, but Hudson's Bay was not among them. 'Businesses do not fail or succeed because of one person,' he said. 'If anything, Richard probably managed to help keep the company going far longer than it would have if he was not helping to lead the business.' *** A few days before Hudson's Bay was set to close its doors on June 1, Melville, the planning manager who worked for Hudson's Bay for 15 years, visited a store near his home in Kitchener-Waterloo one last time. The first floor resembled a flea market. On one side, brand signs hung precariously from the walls, while menswear had been moved downstairs and strewn across racks; on the other, shoppers wheeled carts filled with store fixtures, scavenging through what remained. Melville had spent most of his career at the Toronto flagship on Queen Street, where, in 2010, Hudson's Bay was still a destination for high-end fashion. Shoppers flocked to the store for its dazzling tapestry of brands, he said, many taking the escalator to the third floor's newly launched women's fashion hall, The Room, or to the fifth floor's West End Shop, an upscale boutique for menswear. Spanning 21,500 square feet, The Room was marketed as a destination for style insiders and the city's fashion elite. Balmain, Victoria Beckham, Bruno Frisoni, Azzedine Alaïa — labels once reserved for the runways of Paris and London, now hung with quiet elegance in the heart of downtown Toronto. That was a testament to Baker's commitment as the new owner: investing millions to support then-president Brooks in her vision to reposition the department store as a more upscale brand. Downtown flagships across the country underwent dramatic renovations, the fashion assortment was reimagined, and sales surged — enough to take Hudson's Bay public in 2012. In 2012, Baker named Brooks president of both Lord & Taylor and Hudson's Bay. A year later, Rodbell, who was serving at the U.S. company at the time, took over the job. This leadership reshuffle marked the beginning of an organizational integration between the two retailers, which operated in distinct markets. Operations across some key functions were merged, with some Canadian teams reporting directly to the leadership at Lord & Taylor — and vice versa. Melville, who was serving as a divisional manager of Hudson's Bay at the time, recalled that in 2013, he travelled to Fifth Avenue in Manhattan every month to meet with his supervisor — the vice-president of luggage and kidswear at Lord & Taylor — who would often instruct him to 'do things their way.' The U.S. business, which had a margin in the low 20s, compared to Hudson's Bay's margin in the high 30s to 40s, relied on discount-driven sales and invested heavily in inventory, he explained. 'They brought some of that business model thinking to us, which really started to drag down our regular-price sales and margins,' Melville said, adding that customers were gradually 'trained' to shop only during sales, while high-end fashion brands and luxury customers drifted away. Melville said he also saw Hudson's Bay's former service model, where sales associates received brand training to provide personalized service to customers, disappear amid staff reductions during the integration. In mid-2017, the operations of Hudson's Bay and Lord & Taylor were separated, but the damage had already been done. A year later, the Canadian company ended its streak of 31 consecutive quarters of same-store sales growth — and it never recovered. The Christmas window displays at Hudson's Bay's Queen Street flagship store were a cherished part of many people's childhood memories. For Dean Melville, the department store's long-standing legacy — and a piece of Canada's national identity — is gone for good. In Melville's view, and the view of many other Canadians, Hudson's Bay died, at least in part, because it was taken over by an American real estate tycoon who didn't understand Canadian customers. In June of this year, Hudson's Bay sold all of its intellectual property rights to Canadian Tire for $30 million, preserving a faint hope that Canadians might still see products bearing the iconic multicoloured stripes on store shelves. But for Melville, the department store's long-standing legacy — and a piece of Canada's national identity — is gone for good. 'There's nothing like it and never will be,' he said. 'And that's a big thing to lose.'
Business Insider
4 days ago
- Business Insider
BI took 5 rides in Tesla Robotaxis. They were impressive — but there were some bumps.
This week, I flew to Austin to do what only a few have been able to: ride in Tesla's Robotaxis. I took five trips that my rider companion and I found mostly smooth, but there were some bumps. We encountered three issues, including one in which the Robotaxi began to drive the wrong way onto an empty one-way street clearly marked with "Do Not Enter" signs. Since the end of June, Tesla has been testing Robotaxi, the company's autonomous ride-hailing service. Musk has said that Robotaxi is part of Tesla's road map to becoming a full-fledged AI and robotics company. The service is still in its early stages. A limited number of autonomous Model Ys navigate Austin roads, and a safety operator sits in on every ride. A small group of people has been given early access to the service, including Vu Kong, an Austin resident who manages a dental group and invests in Tesla on the side. Kong seems to be one of the few Robotaxi invitees who aren't Tesla or EV influencers with a large social media presence. He told me he got access about a week after the Robotaxi launch by signing up on the company website. "I was pretty impressed about how consistent the rides were," Kong said after seven trips. "They were all pretty smooth, and I felt safe in all of them. By the third time, I just forgot I was in an autonomous car. I was doing meetings in the car, taking phone calls, and doing Zoom calls." I took two half-hour rides and three shorter rides with Kong. Pick-up times weren't always consistent, and the app had a few glitchy moments. In Downtown Austin, Tesla will be going up against pick-up times of less than 10 minutes and relatively low prices from Uber, which manages Alphabet's Waymo fleet. A spokesperson for Tesla and a few employees on Tesla's Robotaxi team BI reached out to did not respond to a request for comment. Here's what I saw. A confident Tesla First, the new 2025 Tesla Model Y feels great. I always appreciate how spacious Teslas feel, thanks to the glass roof that allows light to enter the cabin. The seats are comfortable enough, but I wondered why Tesla would go with bright white seats for cars that will presumably be taking on a lot of passengers. The seats are leather, so maybe they'll be easy to maintain. Throughout the rides, I saw an autonomous driving system that can be safe and confident in its maneuvers. Tesla's Robotaxi, unlike its competitors, relies only on external cameras and neural networks to navigate its environment. Our car maintained a safe distance with a cyclist, recognized construction zones that are rampant in Austin, and could judge when to make turns while there was oncoming traffic. Human interventions Despite the mostly smooth experience, I encountered a few disengagements — moments when the safety operator inside the car or a remote support agent had to intervene. Two of the Robotaxi disengagements occurred on the very first route, which we began at around 7 a.m. on Wednesday at Summer Moon Coffee, an Austin-based café chain. At the start, when the Robotaxi was attempting to pull out of the parking lot, a message appeared on the console screen: "Our team has identified an issue and is working to resolve it." A remote "support agent" connected with us: "It looks like the vehicle isn't making any progress. Is everything OK?" In-car safety operators hired by Tesla largely avoid interacting with riders. When the remote agent asked us the question, the operator quietly turned to us and nodded his head, nudging us to talk. It was unclear what caused the Robotaxi to be stuck. There were no oncoming cars and the roads were quiet. After the support agent said they would help, the steering wheel came back to life and made a jerky movement. The Robotaxi inched forward and slammed on the brakes. It's unclear how much control Tesla's remote team had over the vehicle. The Robotaxi pulled out of the parking lot and began its route. The second disengagement came 20 minutes into the ride, when Kong changed the route to return to his office. The safety operator inside the car touched the screen to pause the ride. While I was talking, I hadn't noticed the Robotaxi begin to head the wrong way down an empty, one-way road marked with two signs that said "Do Not Enter." The safety operator did not talk to us. When Kong pressed "Resume Ride," the operator immediately stopped the car again. That's when we realized we were supposed to wait for another remote support agent, who quickly helped us. The Robotaxi made a three-point turn to get back in the right direction. The last disengagement came during my fourth Robotaxi ride on a late Thursday morning. Kong and I wanted to go to the very tip of the phallic-shaped service area Tesla unveiled earlier this week. The Robotaxi app allowed us to put in a destination that was just outside of the service area — a Summer Moon Coffee location in North Austin. The app indicated that the vehicle would drop us off close to the destination, requiring a 10-minute walk the rest of the way. As we approached our destination, Kong changed the route to another location that was within the geofence. The Robotaxi put us on a route that would take the vehicle just outside of the service area for a brief moment in order to head to our new destination. The vehicle soon pulled over, and another remote support agent got in touch with us. "I just wanted to let you know it was routing a little bit outside of our range, so we just changed the route so that it wouldn't go outside our fence," the agent said. At no point did I feel the Tesla Robotaxi put us in danger. It was interesting to see the system's limits. Other Robotaxi limits Pick-up times for the most part were under 10 minutes. On Wednesday afternoon, the Robotaxi app gave us a nearly 30-minute pick-up time for a 20-minute ride. The app showed that a Robotaxi was picking us up from the northern part of the new service area. It was the same Robotaxi we had for the first ride that morning, based on the matching license plate. Kong attempted to find another car with a shorter pick-up time to no avail. It also appears that Tesla's Robotaxis are avoiding the highway. During our fourth ride to North Austin in the upper part of the service area, Kong, who has lived in the city for five years, said the Robotaxi was taking a longer route to a destination that should be about an 18-minute trip. "Normally we'd take the highway to get there," he said. Musk has long pitched an autonomous car that is generalizable — meaning the vehicle could handle any environment, including highways, with few operational limits and without the need to map a region before deployment. The AI driver is trained on large amounts of data, so, in theory, it should be able to drive the same way a human driver can go through unfamiliar areas. It's unclear why the Tesla Robotaxi avoided the highway. Tesla's FSD (Supervised) handled San Francisco's highway flawlessly in BI's last test. Kong added that the drop-off location could be improved so that the Robotaxi is closer to the actual destination. In terms of the app experience, Kong told me that it can be a bit buggy. We saw one moment when the app showed that a car was arriving in 29 minutes, even though we had just ended our ride and did not order another Robotaxi. A work in progress My colleagues and I at BI have closely reported on the robotaxi race, the efforts Tesla has made to push out an autonomous driver system, and the bold promises Musk has made around self-driving cars and artificial intelligence. I've also compared Tesla's Full Self-Driving (Supervised), the EV company's advanced driver-assistance system, to Waymo with my colleague Alistair Barr. I walked away impressed that FSD could navigate San Francisco roads and highways using only cameras, but saw a critical error after the Tesla ran a red light. My expectations for the Tesla Robotaxi were high — I expected quiet, uneventful rides — but I also suspected that it would probably not be perfect. The company has indicated that the Austin service is a "pilot launch." Safety operators are inside the vehicle, access is limited to invitees, and the company is charging a flat fee of $6.90 per ride. Waymo began testing its own robotaxi service with an early-access program in California in 2021. That year, the company reported 300 disengagements to the California Department of Motor Vehicles. In 2024, when Waymo opened up to the San Francisco public, the company reported about 245 disengagements in the state. Waymo also says it's now providing over 250,000 paid rides a week.
