AI shift could cut millions of Indian BPO jobs by 2030, analysts warn

BENGALURU, INDIA — India’s business process outsourcing (BPO) sector, a US$50 billion industry that has employed millions and powered the country’s middle class for decades, is facing an existential shift as artificial intelligence (AI) begins replacing human agents. 

In an industry discussion from AIM Network, journalists discussed that by 2030, employment could drop from four million to fewer than one million, upending livelihoods and transforming how customer service is delivered.

The rise of empathetic AI voice agents

For decades, BPOs provided job stability for Indians seeking alternatives to government employment. 

“BPO in India and data entry segments in India define what IT services are right now… For Indians who could not find that in government services, they found it in BPO services,” said Novinstan Lobo, associate editor at Analytics India Magazine.

AI-powered voice agents are evolving to handle customer queries with human-like empathy, tonal variation, and conversational nuances. 

“Companies are building voice agents who can recognize all those gaps… which can giggle with you, which can smile with you, which can use an empathetic tone, which can apologize,” Lobo explained. 

The shift is already evident: callers often encounter robotic voices for initial queries, with human intervention reserved for complex or urgent issues.

Shift from BPO to agentic process outsourcing

The industry is also transitioning toward agentic process outsourcing (APO), where AI orchestrates workflows, and humans supervise outputs. 

“BPO is not dying, BPO is reinventing itself… They bring a huge chunk of functioning under one small umbrella because the AI can do the entire workflow in a fraction of a second,” Lobo said.

While companies may see revenue soar from US$50 billion in 2024 to US$140 billion by 2031, the human cost is steep. 

Many displaced workers have moved into gig economy roles, such as driving or delivery, sometimes earning more than their former BPO salaries. 

“From the employer’s perspective, there’s no empathy… With AI, he’s just looking at the profits, the revenues,” Lobo noted.

As India pivots from BPO toward advanced AI-driven services, there is a strategic need for adaptation of both workers and companies. 

The shift highlights a need for career flexibility and forward-looking workforce planning. 

“You need to think about the next 10 years, jobs that will persist in your own field… and then make a shift towards it, not necessarily upskill, make a career change also if needed,” Lobo advised.

The BPO industry transformation demonstrates that automation and AI development have reached a point where it requires organizations to adopt technology-based solutions instead of their existing outsourcing processes. The organization needs to achieve increased efficiency and higher profits while developing methods to assist its employees in using advanced technologies that create new job opportunities.