Indian Firm Cuts Staff by 30% with AI

Hunar.AI, founded in 2022 by Krishna Khandelwal and Shantanu Bhattacharyya, specializes in AI-powered management of frontline workforces, a segment that constitutes 80% of the global workforce but receives less than 1% of technology investment. The company's platform has managed over 10 million candidate interactions using multilingual AI agents on communication channels like WhatsApp. For its clients, Hunar.AI claims its technology can slash hiring and onboarding times by 90% and cut hiring cycles by up to 75%. The move to leaner, AI-driven operations is a broader trend in India's $280 billion business process outsourcing (BPO) sector, which has long relied on its large, English-speaking workforce. This traditional model is now being disrupted by generative AI that can handle a vast number of customer service queries with human-like cadence. Startups in this space claim their AI agents can reduce the number of necessary workers by as much as 80%. This technological shift is forcing a reckoning in a country where the IT and BPO industries account for 7.5% of the GDP. Investment bank Jefferies has predicted that the adoption of AI could lead to a 50% loss in revenue for India's call centers over the next five years. This is prompting a national conversation about the future of work, with some advocating for a shift from services to product design and manufacturing. For small and medium-sized businesses in India, the cost of implementing this technology is becoming more accessible. OpenAI, for instance, has launched a low-cost subscription plan in India called ChatGPT Go for ₹399 per month, payable through UPI. This plan offers access to their latest models, aiming to increase adoption among a price-sensitive user base. The application of conversational AI is proving particularly effective on WhatsApp, which has over 535 million active monthly users in India. Businesses using the WhatsApp Business API are seeing significant returns, with some reporting a 70% reduction in customer service costs compared to traditional call centers. Case studies show small companies increasing their order conversion rates from as low as 8% to 52% after switching to WhatsApp for customer interactions. This trend extends beyond customer service into internal HR processes. Hunar.AI has launched a self-serve platform allowing small and medium-sized businesses to create and deploy their own Voice AI HR agents for tasks ranging from hiring and onboarding to employee retention, without needing specialized technical support. During peak demand, one of India's largest e-commerce companies used these AI agents to engage with 250,000 frontline workers in just three days. While the narrative of AI-driven job cuts is prominent, some experts suggest the reality is more nuanced. OpenAI's CEO has pointed to "AI washing," where companies blame AI for layoffs that would have happened anyway for other economic reasons. Research indicates that while many companies are investing in AI, a majority are not yet seeing a significant financial return, and some are even rehiring for roles previously cut, suggesting the technology is not yet mature enough to fully replace human expertise and empathy. The Indian government is actively encouraging AI adoption, betting that it will create new types of jobs and transition the country from the "world's back office" to the "world's AI factory" by meeting the demand for AI engineers and automation deployment specialists. Prime Minister Narendra Modi has stated that technology changes the nature of work rather than eliminating it. This is reflected in the growth of AI-focused training centers aimed at reskilling the workforce.