Fintech giant PhonePe has reduced its customer support staff by 60% over the past five years, according to its latest annual report filed on October 21. The company’s support team, which once had around 1,100 agents, now consists of just over 400. This significant reduction is part of PhonePe’s shift toward artificial intelligence (AI)-powered solutions for handling customer issues.
Despite cutting back on human staff, PhonePe has seen an enormous 40-fold increase in transactions from FY19 to FY24. “This efficiency was achieved by increasing automated customer service issue resolutions, powered by AI-driven chatbots, to over 90%,” the company stated in the report.
PhonePe has navigated several external challenges in recent years, including the introduction of the Zero Merchant Discount Rate (MDR) law and the impact of the Covid-19 pandemic. Both of these changes reshaped the financial services industry. However, the company credits its focus on automation and cost management for helping it reach profitability.
The reduction in staff has not hurt customer satisfaction. PhonePe reported that its Net Promoter Score (NPS), a key measure of customer satisfaction, has consistently risen over the past five years.
Although PhonePe reduced its customer support team, it has still been a major job creator in India. The company highlighted that its technological advancements have helped generate over 22,000 jobs across the country. Currently, more than 1,500 engineers are working at PhonePe to develop innovative solutions for India’s growing digital payments ecosystem.
Artificial intelligence has been crucial to PhonePe’s ability to streamline operations. According to Nick Bunker, an economist at Indeed Hiring Lab, AI is impacting jobs across many sectors, but it is unlikely to lead to mass unemployment. “History shows us that other major technological advancements haven’t caused widespread job losses. While technology can eliminate certain roles, it also creates new ones,” Bunker said.
Financially, PhonePe has experienced impressive growth. In August, the company reported revenue of ₹5,064 crore for the financial year ending in March 2024, a 74% jump from ₹2,914 crore in the previous year. The company also announced that it had reached profitability, excluding costs related to Employee Stock Ownership Plans (ESOPs), posting an adjusted net profit of ₹197 crore for FY24. This marks a sharp turnaround from the ₹738 crore loss recorded in FY23.
PhonePe’s focus on AI and automation, along with its ability to scale operations efficiently, has positioned the company for continued growth in India’s competitive digital payments space.
