AI Takes Over Customer Service Operations At PhonePe

According to the company's FY23-24 annual report, the workforce in customer service dropped from 1,100 to just over 400

PhonePe has significantly scaled down its customer service workforce, cutting the team by 60 per cent and depending on AI-driven chatbots to resolve the majority of customer queries. According to the company's FY23-24 annual report, the workforce in customer service dropped from 1,100 to just over 400. Automation now handles over 90 per cent of issues, enhancing efficiency and cutting operational costs.

Despite the reduction in staff, PhonePe emphasised that there were no layoffs, as the downsizing occurred over five years, primarily through attrition, with vacant positions left unfilled due to advances in automation. This AI-led strategy has helped boost customer satisfaction, with PhonePe's Net Promoter Score (NPS) steadily improving over the past five years.

A spokesperson from PhonePe clarified, “PhonePe, we have always embraced innovation, and AI and automation are integral parts of our strategy to improve efficiency and enhance the experience for our users. However, it is important to note that these advancements have not resulted in any layoffs. To clarify, while AI and automation have enabled us to optimize certain repetitive tasks, this has not involved layoffs. Instead, we have achieved this optimization by not hiring new employees for specific roles and not creating open positions for tasks that can now be automated. No existing employees have been laid off as a result of this transition. Also, this change in number has happened over 5 years. The media that is reporting this should account for normal attrition, which were not backfilled due to automation, and not attribute it to any changes we have made as an organization."

The fintech firm also reported a 74 per cent revenue growth for FY23-24, reaching INR 5,064 crore. It recorded its first profitable year, with an adjusted Profit After Tax (PAT) of INR 197 crore, reversing a loss of INR 738 crore from the previous year.

In leadership changes, Judith Jane McKenna will step down as Director at the end of January 2024. Donna Morris was appointed as Additional Director on 24 January 2024 and confirmed as Nominee Director at the Extraordinary General Meeting on 28 March 2024.

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