India’s call centre industry faces existential threat: How AI chatbots are killing jobs

At a Bengaluru startup, developers ar workings on AI chatbots that tin talk like humans. Companies such as LimeChat and Haptik and others are leading the charge and they aim to make customer-service roles redundant. Its generative AI agents, the firm claims, can reduce by 80% the number of staff required to manage 10,000 monthly queries, according to a Reuters report.

Jobs that once relied on straight out of college graduates in customer support, technical assistance, and data management are now moving towards Artificial Intelligence.

Reuters spoke to several industry insiders, recruiters, workers, and officials and visited AI chatbot startups in Bangalore.

India is not just rolling out traditional jobs, but it is also betting that AI will create enough new opportunities to offset the losses.

This market is projected to grow 24% annually, reaching $41 billion by 2030, according to consultancy Grand View Research.

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The business process management sector in India employs 1.65 million workers across call centers, payroll, and data management.

While demand for AI coordinators and process analysts is rising, hiring has slowed sharply due to automation and digitalization.

TeamLease Digital, a staffing firm, reports net headcount growth in this segment of fewer than 17,000 in each of the past two years, down from 130,000 in 2022-23.

Workers report growing insecurity as AI tools suggest responses and autonomously handle routine queries.

Megha S., a 32-year-old former customer-service employee in Bengaluru, told Reuters that she was laid off last month as her company adopted AI to review sales calls.

Startups like LimeChat and Haptik, a Reliance-owned firm, are capitalizing on this shift.

LimeChat claims its bots handle 70% of customer complaints for clients and plans to reach 90-95% within a year. Its revenue soared from $79,000 in 2022 to $1.5 million in 2024.

Haptik reports similar growth, claiming AI agents can reduce support costs by 30% while delivering human-like interactions.

Brands such as Mamaearth and Kapiva are using AI chatbots for customer queries, from diet plans to product recommendations, with scalability as the primary draw.

Even as companies embrace AI, challenges remain.

Some chatbots fail to answer complex questions, and surveys show many consumers still prefer human support.

An EY survey in August 2024 found that 78% of Indian consumers prefer platforms offering human interaction, despite 62% making purchases influenced by AI recommendations.

India’s IT boom, once anchored in coding and back-office work, is now shifting toward AI.

Training centers in Hyderabad’s Ameerpet, once focused on Microsoft Office and Java, now offer courses in AI data science and prompt engineering.

Venture capitalist Vinod Khosla told Reuters that “all IT services will be replaced in the next five years” and described the transition as “pretty chaotic.”

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