Dukaan CEO lays off 90% of his support staff in favour of AI chatbot

Suumit Shah, founder and CEO of Bangalore-based e-commerce startup Dukaan, announced via his Twitter account that he has laid off 90% of his customer support staff in favour of using an AI chatbot. 

The bot was built by one of the firm’s data scientists, and according to Shah was able to respond to initial queries instantly, compared to the average staff time of one minute and 44 seconds.

In his tweet, Shah admitted that the layoffs were “tough, but necessary”, explaining that given the state of the economy, startups are prioritising “profitability”.  

Customer Support has apparently been a long-time struggle for Dukaan. In a conversation with CNN, Shah said that the company had cut the cost of its customer support function by 85% after introducing AI technology. He reasoned that this part of the business had been problematic for some time, with delayed responses and limited availability of staff at critical times, among other issues.

That’s what prompted Shah to come up with the idea to create a personal AI-assistant for Dukaan, which would answer customer queries instantly, precisely, and from anywhere. Dukaan’s AI-lead Ojasvi Yadav stepped up to the plate.

According to Shah’s Twitter thread, just a day after the bot was launched, Dukaan’s AI chatbot ‘Lina’ had resolved 200 lives chats and 1400 support tickets. The success of Lina propelled the team to create Dukaan’s new product ‘BOT9.ai’. It is an AI assistant, that can learn the ins-and-outs of a business, and answer customer queries instantly, 24/7. 

As Shah tweeted, “it’s less magical, sure, but at least it pays the bills!”

Considering the era of AI we are in now, and the general widespread layoffs by tech giants, Shah’s decision had been met with much criticism. However, Shah continued to justify the layoffs by emphasizing how AI technology can optimise their operations. 

Moreover, Shah believes that allocating employees’ expertise to areas requiring critical thinking, while relegating routine tasks to AI-powered chatbots, improves efficiency while also allowing for a better allocation of human resources.

Many Twitter users were enraged at the apparent pride in Shah’s tweets. One user tweeted, “You disrupted the lives of 90% of your support team & you’re celebrating it in public. You also likely destroyed your customer support (disprove with good CSAT for the bot) – all for a basic ChatGPT wrapper. This is a new low even for you.” 

While the announcement may read as apathetic, it is not surprising that major companies are turning to AI to improve general performance and efficiency in what are considerably quite routine tasks. 

According to a report from outplacement firm Challenger, Gray & Christmas, which looks at layoffs across every industry, around 5% of May’s job cuts in 2023 were directly related to artificial intelligence. 

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