Customer Service Shakeup: Lessons from AI Rollouts

Part of the Future of Work Series

Note: Written with the help of my research team 🙂 including: (Google Gemini, Google Notebook LM, Microsoft Copilot, Perplexity.ai, Claude.ai and others as needed)

A dramatic shift is reshaping customer service in boardrooms around the world. AI agents are rapidly taking over from human representatives, promising lower costs, faster response times, and 24/7 availability. However, the reality behind the headlines is much more complicated, and some high-profile companies are already dealing with unexpected consequences.

Companies Leading the AI Charge

Major brands have embraced AI automation at scale, but their stories offer both inspiration and caution.

• Salesforce: In early 2025, Salesforce cut 4,000 customer support jobs, dropping from 9,000 to 5,000 employees. CEO Marc Benioff revealed that AI agents now handle more than a million customer conversations weekly, saving the company 17% on support costs. The shift was striking for a company whose leaders once stated that AI would “augment, not replace” jobs Salesforce introduces Einstein Copilot Salesforce cuts jobs amid AI push.
• Klarna: Swedish fintech Klarna launched an AI chatbot in 2024, replacing the work of 700 full-time agents and saving $10 million. The company initially celebrated the move, but would later reverse course Klarna’s AI bot handles customer service FT on Klarna chatbot job cuts.
• Dukaan: This Indian e-commerce platform replaced 90% of its support staff with an in-house chatbot. CEO Suumit Shah touted an 85% reduction in customer support costs and much shorter wait times Dukaan swaps support for AI chatbot TechCrunch on Dukaan chatbot.
• Microsoft: Without fanfare, Microsoft began reducing customer service roles as AI took on more responsibilities in its call centers Microsoft quietly cutting call-center staff amid AI rollout.
• Onclusive (France): This media monitoring firm fired 217 employees due to AI automation—the first major instance of AI-induced redundancy in France. After union resistance, 146 staff members were ultimately dismissed for economic reasons AI at Onclusive led to France’s first large-scale job cuts.

The Consequences: Human Cost and Quality

The fallout from AI-driven automation is significant and poses challenges for workers and companies alike.

The Human Cost

Estimates suggest that 300 million jobs worldwide are at risk of AI automation Goldman Sachs: 300 million jobs threatened. Surveys indicate that 38% of companies planning AI adoption by 2025 will use the technology to replace employees IBM CEO: AI to replace back-office roles. Customer service representatives rank sixth among the professions most disrupted by generative AI McKinsey jobs impact.

Many displaced workers have been pushed into gig-style jobs, sacrificing stability for flexibility. Klarna even proposed an “Uber-style” arrangement for former customer service workers.

The Quality Problem

Customers now expect not just quick answers but true understanding. A recent study from Carnegie Mellon University revealed that even advanced AI workers can only successfully complete 24% of their assigned tasks CMU: Generative AI only boosts ~25% of work. AI still struggles with empathy, nuanced interactions, and complex problem-solving—areas where human support excels.

The Backpedal Begins

Klarna exemplifies the growing reassessment of AI-only strategies. In 2025, the company admitted that an AI-centric approach resulted in “lower-quality” service and began rehiring human representatives Klarna CEO: AI-only cut quality, rehiring humans. Over half of UK business leaders who had replaced staff with AI now regret their decisions, as practical results fell short of expectations Survey: Half of UK business leaders regret AI-driven layoffs.

Companies are realizing that great service is about building positive experiences and relationships—not only resolving tickets. The cost savings from automation can be offset by customer churn and reputational damage if service quality declines.

Looking Ahead: What Should Change?

• For Companies: AI must be a tool to augment human productivity—not an excuse for erasing jobs. Complex or emotionally charged issues should always have a human backup option, and savings should never come at the expense of service quality.
• For Workers: Compassion, creative problem-solving, and relationship-building are more valuable than ever. The workers best positioned for the future are those who can blend tech skills with uniquely human qualities.
• For Customers: The transition to AI service will be rocky. Some companies will succeed by balancing automation and human empathy, while others risk frustrating their users with bot-only experiences.
• For Policymakers: France has set a precedent by requiring employers to exhaust retraining and adaptation before making AI-related layoffs. The government estimates only 5% of jobs are directly replaceable by AI, but up to 20% of workers may be significantly affected, emphasizing the need for robust worker protections and retraining programs France requires retraining efforts before AI layoffs.

The Bottom Line

The rush to replace customer service representatives with AI is one of the loudest flashpoints in the debate over the future of work. While automation can bring real benefits, results so far suggest that moving too quickly creates as many challenges as solutions. As Klarna and others have learned, remembering that customers are humans, who sometimes need real human connection, is the most futuristic move of all.

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