Dukaan fires 90% support staff, switches to AI chatbot

E-commerce startup Dukaan has laid off 90% of its customer support team with an artificial intelligence (AI) chatbot, the company's founder and chief executive Suumit Shah writes in a tweet.

Citing the Bengaluru-based startup's focus on "profitability", Shah says, "Given the state of economy, startups are prioritizing profitability over striving to become unicorns, and so are we. It's less magical, sure, but at least it pays the bills!"

Shah claims it was "tough" but "necessary" to sack 90% of the support staff. "Customer support had been a struggle for us since long and fixing it felt like an opportunity to me," the startup founder says.

"Time to first response went from 1m 44s to instant," he says, adding that the average resolution time went from 2 hours 13 minutes to 3 minutes 12 seconds.

With the layoffs, the startup has reduced its customer support costs by around 85%.

"Why would someone with a tech/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," Shah writes in a thread.

The idea was to build Dukaan's own AI assistant, which would answer customer queries instantly and precisely, anywhere, Shah says, adding that Dukaan's lead data scientist Ojasvi Yadav built a chatbot that could answer almost all common questions about Dukaan instantly and accurately. "However, account-specific questions like 'why has my payout been pending for 2 days?' the answers fell short," he adds.

A day later, Yadav came up with another demo and this time the bot answered both generic as well as account-specific questions, instantly, claims Shah.

Meanwhile, the Dukaan founder faced flak from Twitter users who accused him of "celebrating" the layoffs in public. "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," writes Twitter user Lakshmi Narayanan G.

When another Twitter user asked as to what happened to the 90% of staff that was fired, Shah said he will talk about the assistance provided to the laid-off staff on LinkedIn. "On Twitter, people seek content around profitability and not sympathy," he said.

This comes weeks after Nithin Kamath, the founder of India's largest brokerage, said that Zerodha will not sack anyone even if artificial intelligence makes an earlier job redundant. Kamath expects AI to take away jobs and disrupt society, and this has prompted the brokerage to formulate an internal AI policy. "We will not fire anyone on the team just because we have implemented a new piece of technology that makes an earlier job redundant," the Zerodha CEO said, adding that the company’s new AI policy will give clarity to the team amid job loss anxiety due to AI.

In June, Union minister of state for electronics and information technology (MeitY) Rajeev Chandrasekhar said the government plans to regulate artificial intelligence (AI) to ensure digital citizens are protected. "There is a narrative and melodrama around AI and then there is a reality. It is possible that over the next five years or 10 years that AI will become intelligent enough that it will replace jobs. But today, the application of AI is on tasks as it creates more efficiency," Chandrasekhar said.

"While AI is disruptive, we do not see in the next few years the so-called threat of it replacing jobs because the current state of development of AI is that AI is very task oriented while jobs involve reasoning and logic," the minister said, adding that AI is not sophisticated enough at this stage, which is not to say that it will never happen.