Dukaan, a Bengaluru based startup has laid off over 90 per cent of its support staff and replaced them with AI bots. The founder has justified this move, saying that although tough, it was a necessary decision, and why should a tech or product expert work as a support agent
Dukaan, a startup based in Bengaluru, has made significant changes to its support team by implementing an AI chatbot, leading to a 90 per cent reduction in staff. Suumit Shah, the founder of Dukaan, explained the decision in his recent tweets, highlighting that the AI chatbot has not only improved response times but also reduced customer support costs by approximately 85 per cent.
In one of his tweets, Shah shared the positive outcomes of the change, stating that the time to first response has been reduced from 1 minute and 44 seconds to instant, and the resolution time has decreased from 2 hours and 13 minutes to 3 minutes and 12 seconds.
Justifying the layoffs
He justified the layoffs by emphasizing that the intention was not to replace humans with AI, but rather to leverage AI technology to optimize operations, particularly in customer support. Shah believes that it is more efficient to utilize the expertise of employees in specialized areas while assigning routine tasks to the AI-powered chatbot.
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This strategic decision saves time, reduces costs, and enables the company to allocate human resources more effectively.
Shah compared the situation to having someone with technical or product expertise working as a support agent, equating it to Lionel Messi doing a full-time job at Decathlon. He acknowledged the merit in the theory but ultimately deemed it flawed.
Changing times, changing ways of managing a business
Although Dukaan has downsized its workforce in certain departments, the company has also announced job openings in other teams, specifically in AI, e-commerce, and product design.
Furthermore, Dukaan had previously conducted layoffs, with 23 employees being let go in September of the previous year, followed by the termination of at least 57 employees in the early months of 2023. These layoffs affected various departments, including sales, business development, and operations.
More and more companies switching to AI
It is worth noting that Dukaan is not the only company adopting AI to enhance efficiency and reduce costs. In May 2023, US companies announced a record-breaking 80,089 job cuts, with 3,900 of them attributed specifically to AI in the tech sector.
While concerns about AI replacing human workers are widespread, Shah’s statement about utilizing human skills for more valuable work holds some validity.
According to experts, whenever a new technology is introduced, the goal has always been to improve efficiency and adapt to the technological revolution. It is possible that we may witness a similar trend with AI technologies like ChatGPT.
