AI agents take over India’s BPOs — what it means for millions of jobs

Dubai: It started as a whisper in tech circles, but it has quickly become a narrative with real human cost: AI chatbots are stepping in for humans in India’s vast call-centre sector. Recently, a Reuters deep dive showed how startups like LimeChat are deploying generative AI agents that can handle up to 95 percent of customer queries, helping companies reduce staffing by as much as 80 per cent.

At LimeChat’s Bengaluru office, founders and engineers fine-tune conversational AI to respond almost indistinguishably from humans. As co-founder Nikhil Gupta put it: “Once you hire a LimeChat agent, you never have to hire again.”

For businesses, the appeal is obvious — lower costs, scalability, and 24/7 availability without fatigue, sick days, or turnover.

India’s call-centre boom

India’s rise as a global outsourcing hub was built on several pillars: strong English skills, relatively low labor cost, and a growing young workforce eager for white-collar jobs. The BPO (business process outsourcing) and customer-service sector became a lifeline for many, absorbing millions of graduates seeking remunerative employment.

Over decades, Indian call-centre workers, sitting behind headsets in air-conditioned halls, became the visible face of globalization. Their voices — clear, practiced, often neutral in accent — were the connection between corporate clients abroad and local labour. But that model depended on repetitive, scripted queries: check balances, reset passwords, track orders, simple troubleshooting.

In recent years, AI has crept into this space not as a replacement but as a helper — chatbots or 'co-pilots' assisting human agents with suggested responses, summarizing customer context, or automating parts of conversations.

But now, the shift is accelerating: bots are no longer sidekicks but the front lines.

What’s changing — and who’s affected

According to the Reuters report, in India, the BPO segment employs roughly 1.65 million people in data processing, voice support, and administrative tasks.

In recent quarters, hiring in this sector has slumped sharply: the headcount growth in business process management fell from tens of thousands to under 20,000 annually.

Workers interviewed for the report described sudden layoffs: in one case, “I was told I am the first one who has been replaced by AI.” Some of them had not even informed family yet, fearing stigma and uncertainty.

The consequences ripple beyond lost wages. Many Indian households depend on BPO incomes. Career paths that once seemed stable — call centre supervisor, team lead, operations manager — are now under question. In cities like Bengaluru, Hyderabad, Pune, and NCR, where much of the outsourcing industry is clustered, the social impact may be profound.

Yet, the machines are imperfect. Several customers still prefer human interaction, especially when issues are complex, emotional, or require empathy. Moreover, bots struggle with ambiguous queries, dialects, or cases needing judgment beyond script.

Some startups highlight that their AI agents can already handle up to 70-80 percent of queries, with plans to push to 90–95 per cent. Startups like Haptik (now part of Jio Platforms) continue to thread the AI-human line, offering conversational AI platforms that enterprises integrate alongside human teams. Others include Yellow.ai, which supports multilingual voice & chat automation across dozens of languages.

Governments and education policymakers are watching closely. In India, Prime Minister Modi has stated that “work does not disappear due to technology — its nature changes.” But critics argue that skill training and social safety nets lag behind.

The road ahead

India’s experiment with AI in call centers may be watched globally as a test case. Will the cost savings and scalability outweigh social dislocations? Can displaced workers adapt quickly enough? Will regulation or policy intervene?

Some experts call for a middle path: blended workforce models, where AI handles routine queries and humans handle exceptions; strong emphasis on ethical AI design; investment in retraining; and social policies to cushion transitions.

For now, across tech parks in Bengaluru and beyond, the next headsetless BPO worker might be silicon, not human.