PhonePe, the fintech major, has significantly reduced its customer support workforce by 60 per cent over the past five years, cutting staff from around 1,100 agents to just over 400, even as the company experienced a 40 times surge in transactions between FY18-19 and FY23-24, according to its annual report filed on 21 October.
This sharp reduction in staff was achieved through the company's extensive reliance on AI-driven automation, with more than 90 per cent of customer service issues now being resolved by chatbots. Despite the downsizing, PhonePe has maintained and even improved its customer satisfaction levels, reflected in a consistently increasing Net Promoter Score (NPS) over the same period.
"Despite significant external challenges over the past five years, including the Zero MDR law and the Covid-19 pandemic, our relentless focus on process automation and unit economics has driven a clear path to profitability," the report noted.
In addition to automation, PhonePe has tapped into the growing demand for voice-based and Indian language conversational AI solutions in India. Several enterprise customers and mid-sized firms are now turning to conversational AI startups, including PhonePe, to develop voice-based customer support assistants.
PhonePe in a statement said that the recent media reports that have inaccurately suggested that PhonePe has laid off employees due to the integration of AI and automation. These reports are factually incorrect, and we would like to clarify our position.
"At 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," it added.
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, it stated.
PhonePe mentioned, "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 org."
In FY24, PhonePe reported a substantial 73 per cent increase in revenue, reaching Rs 5,064 crore, driven by cost efficiency and product diversification. This marks a significant leap from the Rs 2,914 crore revenue recorded in the previous fiscal.
Moreover, PhonePe Group has turned its Adjusted Profit After Tax (PAT) positive, registering Rs 197 crore, a notable recovery from the Rs 738 crore loss posted last year.