Indian startup fired 90 percent of its staff, replaced them with an AI chatbot

CEO Suumit Shah said that after the integration of the AI, the response time of their customer support service went down from one minute and 44 seconds to zero seconds.
Sejal Sharma
Representative image.
Representative image.


An Indian startup is claiming that it replaced 90 percent of its support staff with an artificial intelligence-powered chatbot called Lina.

In what many are calling a ‘heartless’ and 'insensitive' move, the CEO of the company Dukaan took to Twitter to make the announcement.

Suumit Shah said that after the integration of the AI, the response time of their customer support service went down from one minute and 44 seconds to zero seconds. And the time taken to resolve a query went down from two hours and 13 minutes to three minutes and 12 seconds.

Shah further said that because of the current state of the economy and the failure of the company’s human customer support to understand the intricate complexities of their business model, the move was “Tough? Yes. Necessary? Absolutely,” he wrote.

Response to announcement not all that great

One Twitter user replied to the tweet saying, “Maybe it was the right decision for the business, but it shouldn't have turned into a celebratory/marketing thread about it. IMO.”

“My favorite part about conversing with a chatbot is where it replies, “Hang on, we are connecting you to a human”,” wrote another Twitter user.

As has been pointed out by many, slashing 90 percent of jobs seems like a marketing gimmick because Shah told CNN that the purported layoffs were done 10 months ago in September 2022. It’s not clear if Dukaan has laid off more employees since or whether the 23 employees the company laid off last year indeed made up the 90 percent of the sacking it is claiming today.

Shah is also claiming that Dukaan’s customer support costs have been reduced by 85 percent.

What does Dukaan do? It’s a Bengaluru-based startup that provides SaaS-based storefront solutions for e-commerce businesses. The solutions include product listing, customer chat support, order management, managing delivery fees, and social media sharing. It also provides an analysis of sales, regions, traffic, and products.

Personalized customer support

Ojasvi Yadav, Dukaan’s lead data scientist whom Shah has touted to be somewhat of a machine learning wizard, apparently developed the AI chatbot Lina in two days. Shah admitted that Lina could answer common questions about Dukaan instantly and accurately. But the chatbot fell short when it was asked account-specific questions like “Why has my payout been pending for two days?"

Shah claimed that the morning after Lina was launched, he woke up to 1400 support tickets being marked 'resolved.'

Shah also announced in his tweet the launch of a personalized AI service platform called Bot9, which allows businesses to build their own AI assistant in 30 seconds, and “reduce customer support costs.” Their API runs on OpenAI’s large language model chatGPT and is available for $69 per month on the website.

'Will my job be replaced by AI?'

Dukaan’s rollover to AI has blown up across social media, largely playing into the idea that AI will replace people's jobs.

Companies like Bank of America are rushing to integrate AI, virtual reality, and the metaverse into their hiring process, reported Bloomberg.

People are worried, a sentiment that has been felt especially since the launch of ChatGPT last year, by a flood of new AI tools hitting the market almost every day.

One Twitter user, in response to Shah, commented: “You disrupted the lives of 90% of your support team & you're celebrating it in public.”

When Shah was asked as to what kind of “assistance” was provided to the people Dukaan laid off, he tweeted in Hindi, which when converted to English read as: “​On Twitter, people prefer to see ‘profitability’ over ‘sympathy’.”

Ironically, this comes two days after Indian Union Minister of State for Electronics and Information Technology, Rajeev Chandrasekhar blatantly rejected AI as a threat to human jobs. He termed the notion as “nonsense, bakwas (rubbish), and zero.” 

Interesting Engineering had earlier reported on a nonprofit that chose to replace its staff with an AI chatbot to provide support to people with eating disorders. But as it turned out, the chatbot provided problematic information to people dealing with eating disorders.

The Indian stereotype

While questioning the company’s decision, many on the internet are also playing into the stereotype that Indians make for great customer support technicians because of low labor costs and a large English-speaking population. Precisely the reasons why call centers across the globe outsource the services of Indian technicians.

The Dukaan story is concerning because companies now have a precedent for replacing one of the cheapest labors in the world with an even cheaper alternative.

Shah in his tweet thread also questioned why somebody with tech/product expertise will 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.” Shah tried to justify and downplay the layoffs by comparing his fired customer support staff to Messi, a footballer known for his exemplary skills on the field. But interestingly enough, Shah’s website listed eight areas in which his customer service was lacking - generic responses, inefficient collaboration, unnecessary tickets, poor communication, delayed responses, escalation issues, limited availability, and wrong troubleshooting.

Food for thought

India has been facing an unemployment problem for months now. As per the estimates by the Centre for Monitoring Indian Economy, the unemployment rate increased in April 2023 to 8.11 percent from 7.8 percent in March 2023. “The unemployment rate has been on an upward trend since the start of the year, recording an increase for the 4th consecutive month,” said the independent think tank.