Dukaan replaces support staff with AI chatbot, says it is efficient while humans are overqualified and fussy

By Divya BhatiBengaluru-based startup Dukaan has laid off 90 per cent of its support team. The reason? It is now using an AI chatbot to deal with customer queries. Dukaan founder Suumit Shah talked about layoffs in his recent tweets, announcing that he has replaced almost the entire support team as the company’s AI chatbot has not only helped in reducing the resolution time, but it has also reduced customer support costs by 85 per cent.

“Tough? Yes. Necessary? Absolutely. The results? Time to first response went from 1m 44s to INSTANT! Resolution time went from 2h 13m to 3m 12s Customer support costs reduced by (around) 85 per cent,” reads one of the tweets of Suumit Shah.

In light of the growing concerns regarding AI’s potential to replace human workers, Shah further justified the layoffs by emphasising that his intention was not to replace humans with AI. Instead, the company aims to leverage AI technology to optimise its operations, specifically in customer support. Shah believes that it would be more efficient to use the expertise of their employees in dedicated areas, while assigning routine tasks to the AI-powered chatbot. This, according to him, is a strategic decision that not only saves time but also reduces costs, allowing the company to allocate its human resources more effectively.

“Why would someone with a tech (or) product expertise work as a support agent?… It’s like – Lionel Messi doing a full time job at Decathlon, though the theory has some merit, but is ultimately flawed,” he wrote.

AI more efficient than humans

In other words, Dukkan is saying that its human customer support executives were mostly overqualified and because the nature of the work was repetitive and not so exciting they were likely fussy at work, something that showed in the data. Dukaan founder Shah says that with human support staff it took an average of 2 hours and 13 minutes to resolve a customer. With the AI chatbot the same now happens in less than 4 minutes.

Now, even as Dukaan has laid off employees in some departments, the company has also announced vacancies in other teams. The company has announced that it is hiring for multiple roles in AI, e-commerce, and product design.

As for the layoffs, the company has not only reduced its workforce in the customer support team. Last year in September, the startup laid off around 23 employees, followed by the firing of at least 57 employees in the early months of 2023. The layoffs affected multiple departments, including sales, business development, and operations, reported the Financial Express.

Notably, Dukaan is not the only company integrating AI to improve efficiency and reduce costs. In May 2023, US companies announced a record-breaking 80,089 job cuts, with 3,900 of them specifically due to AI in the tech sector. While the debate regarding AI replacing humans is widespread and the layoffs undoubtedly intensify the fear, Shah’s statement about utilising human skills for better work may have some merit. According to some experts, every time a new technology is introduced, the goal has always been to enhance efficiency and adapt to the new technological revolution. It is possible that we may end up seeing the same with AI technologies like ChatGPT.