In a bustling startup office in Bengaluru, India, developers at LimeChat are fine-tuning artificial-intelligence (AI) chatbots capable of talking and messaging like humans — a development that could reshape the future of customer service.
The company has set an ambitious target: to make traditional customer-service jobs nearly obsolete. LimeChat claims its generative AI agents allow businesses to cut up to 80% of human staff needed to handle 10,000 customer queries each month.
“Once you hire a LimeChat agent, you never have to hire again,” said Nikhil Gupta, the company’s 28-year-old co-founder, in an interview with Reuters.
For decades, India’s combination of low-cost labor and English proficiency made it the world’s back office, driving growth in customer support, data management, and IT services. But now, AI-powered systems are automating many of these roles, putting millions of headset-wearing graduates at risk and forcing companies and workers to adapt.
A Reuters investigation — based on interviews with 30 industry leaders, recruiters, and government officials, as well as visits to AI startups — found that India’s $283 billion IT sector is undergoing rapid transformation. Startups like LimeChat are at the forefront, creating tools that can conduct complex, human-like conversations, while corporations turn to automation to cut costs.
Despite job losses, India’s government is embracing AI innovation rather than slowing it down. Officials argue that the technology will create new kinds of employment, even as older roles disappear. Prime Minister Narendra Modi, in a February address, asserted, “Work does not disappear due to technology. Its nature changes, and new types of jobs are created.”
However, experts warn of a looming employment crisis. Santosh Mehrotra, former Indian government official and professor at the University of Bath, cautioned that India lacks a concrete plan to manage AI’s social and economic impact. “There’s no gameplan,” he said.
The business process management (BPM) sector — which employs 1.65 million workers in call centers, payroll, and data services — has seen hiring plunge as automation accelerates. According to TeamLease Digital, net headcount in the sector grew by fewer than 17,000 workers annually over the past two years, compared to 130,000 in 2022–23 and 177,000 in 2021–22.
“Automation and digitalization have reduced the need for human roles, even though demand for AI coordinators and process analysts is rising,” explained Neeti Sharma, CEO of TeamLease Digital.
Many displaced workers describe a sense of uncertainty and instability. Megha S., a 32-year-old former employee at a Bengaluru software solutions firm, said she was laid off just before India’s festive season after her company adopted AI tools to monitor sales calls. “It was like watching a machine replace me in real time,” she said.
The global conversational AI market, projected to grow 24% annually to reach $41 billion by 2030, underscores the scale of disruption ahead. As India races forward with its AI ambitions, it faces a critical question — will embracing automation make it a global leader in AI-driven innovation, or turn it into a cautionary tale of technological displacement?
