Thus, a representative from Alorica who only speaks Spanish can handle a complaint about a faulty printer or an incorrect bank statement from a Cantonese speaker in Hong Kong. Alorica would not need to hire a representative who spoke Cantonese.
Such is the power of AI. And, potentially, the threat: Perhaps companies won't need as many employees - and will cut some jobs - if chatbots can take care of the workload instead. But the fact is that Alorica is not cutting jobs. It is still aggressively hiring.
Alorica's experience - and that of other companies, like the furniture retailer IKEA - suggests that AI may not be the job killer that many people fear. Instead, the technology could be more akin to past advancements: the steam engine, electricity, the Internet: That is, eliminating some jobs while creating others. And likely making workers more productive overall, for their own benefit, their employers, and the economy.
Nick Bunker, an economist at Indeed Hiring Lab, believes that AI "will affect a great many jobs, perhaps all indirectly to some extent. But I don't think it will cause, say, mass unemployment. We have seen other major technological events in our history, and they did not cause a large increase in unemployment. Technology destroys, but it also creates. There will be new jobs."
Essentially, artificial intelligence allows machines to perform tasks that were once thought to require human intelligence. The technology has existed for decades in its early versions, which emerged with a problem-solving computer program, the Logic Theorist, created in the 1950s at what is now Carnegie Mellon University. More recently, think of voice assistants like Siri and Alexa. Or IBM's chess computer, Deep Blue, which managed to defeat world champion Garry Kasparov in 1997.
AI burst into public consciousness in 2022, when OpenAI introduced ChatGPT, the generative AI tool that can hold conversations, write computer code, compose music, draft essays, and supply endless streams of information. The arrival of generative AI has raised fears that chatbots will replace writers, editors, programmers, telemarketers, customer service representatives, legal assistants, and many more.
"AI is going to eliminate many current jobs and will change how many of them operate," said Sam Altman, CEO of OpenAI, in a discussion held in May at the Massachusetts Institute of Technology.
However, the widespread assumption that AI chatbots will inevitably replace service sector workers, just as physical robots took many jobs in factories and warehouses, is not manifesting broadly, at least for now. And it may never do so.
The White House Council of Economic Advisers stated last month that there is "little evidence that AI will negatively affect employment overall." The advisers noted that history shows that technology often makes companies more productive, accelerating economic growth and unexpectedly creating new types of jobs.
They cited a study conducted this year by David Autor, a prominent economist at MIT: It concluded that 60% of the jobs that Americans held in 2018 did not even exist in 1940, as they were created by technologies that emerged later.
The outplacement company Challenger, Gray & Christmas, which tracks job cuts, states that it has not yet seen much evidence of layoffs that can be attributed to AI's labor-saving effects.
"I don't think we have started to see companies say they have saved a lot of money or that they have eliminated jobs they no longer needed thanks to this," said Andy Challenger, who runs the firm's sales team. "That may happen in the future. But it hasn't occurred yet."
At the same time, the fear that AI poses a serious threat to certain categories of jobs is not unfounded.
Consider Suumit Shah, an Indian entrepreneur who caused a stir last year by boasting that he replaced 90% of his customer service staff with a chatbot named Lina. Shah's company, Dukaan, which helps customers create e-commerce sites, reduced the response time to an inquiry from 1 minute and 44 seconds to "instant." It also cut the typical time needed to resolve issues from over two hours to just over three minutes.
"It's about AI's ability to handle complex inquiries accurately," Shah states via email. The cost of customer service was reduced by 85%.
"Difficult? Yes. Necessary? Absolutely," Shah posted on X.
Dukaan has expanded its use of AI to sales and analytics. According to Shah, the tools are becoming increasingly powerful. "It's like moving from a Corolla to a Tesla. What used to take hours now takes minutes. And the accuracy is at a whole new level," he says.
Similarly, researchers from Harvard Business School, the German Institute for Economic Research, and Imperial College Business School in London discovered in a study last year that job postings for writers, programmers, and artists plummeted in the eight months following ChatGPT's arrival.
A study conducted in 2023 by researchers from Princeton University, the University of Pennsylvania, and New York University concluded that telemarketers and English and foreign language teachers were the jobs most exposed to language models similar to ChatGPT. But being exposed to AI does not necessarily mean losing one's job because of it. AI can also do the heavy lifting, freeing up people to perform more creative tasks.
The Swedish furniture retailer IKEA, for example, introduced a customer service chatbot in 2021 to handle simple inquiries. Instead of eliminating jobs, IKEA redeployed 8,500 customer service workers to take on tasks such as advising customers on interior design and handling complicated customer calls.
Chatbots can also be used to increase worker efficiency, complementing their work instead of replacing it. A study by Erik Brynjolfsson from Stanford University, and Danielle Li and Lindsey Raymond from MIT, tracked 5,200 customer service agents at a Fortune 500 company who used a generative AI assistant. The AI tool provided valuable suggestions for assisting customers. It also provided links to relevant internal documents.
According to the study, those who used the chatbot were 14% more productive than their colleagues who did not use it. They handled more calls and completed them faster. The largest increases in productivity - 34% - were among the less experienced and less qualified workers.
In a call center of Alorica in Albuquerque, New Mexico, a customer service representative struggled to access the information she needed to quickly handle calls. After Alorica trained her in using AI tools, her handling time - the time it took to resolve customer calls - was reduced over four months from an average of 14 minutes per call to just over seven minutes.
In a six-month period, AI tools helped a group of 850 representatives at Alorica reduce their average handling time to six minutes, down from just over eight minutes. They can now handle 10 calls per hour instead of eight, meaning 16 more calls in an eight-hour shift.
Alorica agents can use AI tools to quickly access information about the calling customers, for example, to check their order history or to determine if they have called before and hung up frustrated.
Suppose, says Mike Clifton, co-CEO of Alorica, a customer complains that they received the wrong product. The agent can "hit replace, and the product will be there tomorrow," he said. "Can I help you with anything else? No? Click. Done. Thirty seconds in and out."
The company is now beginning to use its real-time voice translation tool, which allows customers and Alorica agents to speak and hear each other in their own languages.
"It allows (Alorica representatives) to handle all the calls they receive," says René Paiz, vice president of customer service. "I don't have to hire outside staff to find someone who speaks a particular language."
However, Alorica is not cutting jobs. It continues to seek employees who are comfortable with new technologies.
"We are still hiring. We have a lot of work to do," Paiz says.