The Role of Artificial Intelligence in Recent Customer Service Layoffs

As companies reduce their workforce with the integration of AI, we delve into the strategies that will shape the future of customer service

The role of artificial intelligence in recent customer service layoffs
Contact CentreInsights

Published: September 11, 2023

Sabine Groven

Sabine Groven

Suumit Shah, the founder and CEO of Indian startup Dukaan, recently announced on Twitter (now X) that the company laid off 90% of its support staff due to implementing an AI-powered chatbot that can handle customer interactions. Similarly, in April, Dropbox, an industry leader in cloud-based solutions, declared a reduction in workforce by around 16%, laying off 500 employees. Co-founder and CEO Drew Houston attributed this decision to the impact of AI in a statement shared on the Dropbox blog.

The new technology has prompted several businesses, from industry giants like Dropbox to startups like Dukaan, to rethink their workforce needs. But what impact will these moves have on the future of customer service talent and the adoption of AI and chatbots?

The evolving landscape of customer service

Gartner analyst Uma Challa explains the dynamics of what we are witnessing in the customer service sector: “Companies are experimenting with virtual agent applications using the evolving GenAI technology in customer service and support. This is creating an incorrect perception that GenAI technology is capable of replacing all human agents,” he says.

Challa argues that the impact on the human workforce might be slower than some fear. To MyCustomer, he says: “There are a lot of factors that will need to be considered for adopting the GenAI technology, such as what type of approach to take: public models, vendor products or custom models? Consider the cost, risk and complexity aspects of each approach.

“What applications of GenAI technology will you prioritise? How are you going to manage the risks of using this technology, such as bias that can have a potential impact on the brand? How mature is your organisation’s data management that can be used to fine-tune the adopted GenAI models and products? What roles do you need to successfully adopt GenAI?

“The organisations that have a good digital transformation strategy and can confidently answer the above questions are better suited to adopt and scale GenAI technology.”

Adapting to the AI revolution

As new technologies are integrated, there is a gradual shift in job responsibilities, and changes are introduced. “Some organisations will double down on the mantra of ‘do more with less’ where agents are augmented with GenAI technology to improve productivity,” Challa predicts. This change in strategy means that there will be fewer new agents hired while more investments will be made in technology.

“Customer service agents should continue to learn how to work with the technology, as technology-driven work reconfiguration leads to agents requiring new or changed skills,” he continues.

Young people fear AI will take their jobs

Strategic skills provider Corndel recently published research revealing the extent to which employees fear AI will take all or part of their jobs, with younger workers particularly worried.

According to the report, 61% believe AI will take at least 25% of their role by 2033, with 38% of 18-34 year-olds fearing that AI will take at least 50% of their job in the next decade.

The report highlights that workplace training and development ensures the data skills gap is closed, and organisations can make data-driven decisions to foster growth and competitiveness.

Key statistics include:

  • 92% of employees working with data think there is a skills gap in their workplace.
  • 82% of employees have had no training in AI use.
  • Nearly half of senior decision-makers believe a lack of data skills is holding back their business transformation.

Younger employees are already acknowledging the risks of being left behind by technology.

James Kelly, CEO and co-founder of Corndel, said: “Younger employees are already acknowledging the risks of being left behind by technology, which is shown in the large number of 18-34-year-olds who think their jobs are at risk from AI.

“Only by implementing continuous skills development programs to support lifetime learning among employees, as well as investing in technology and data infrastructure, can organisations empower their employees to leverage tech and data knowledgeably, confidently and effectively, to fuel transformative change and drive successful performance.”

Strategies for embracing AI in customer service

Uma Challa emphasises the need for a comprehensive strategy, advising service and support leaders to collaborate with other leaders in their organisation: “Especially with IT and control groups such as legal, compliance, risk, information security departments”.

In the face of workforce reductions and the AI revolution, Challa’s advice for organisations revolves around talent management. “For successful digital transformation, talent is a critical requirement,” he says, highlighting the centrality of upskilling and reskilling. Embracing agile learning principles ensures employees remain adaptable and equipped for the challenges and opportunities that lie ahead. “Agile learning future-proofs employees, which, in turn, future-proofs the enterprise.”

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