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Medium reported severity

Dukaan CEO said the e-commerce startup laid off 90% of its support staff because of its AI chatbot; at the time of the 2022 cuts he cited a business shift

In September 2022 Suumit Shah, founder and chief executive of the e-commerce software startup Dukaan, tweeted that the company had let go of 23 employees that week, explaining that after it shifted its focus from small shops to enterprise and direct-to-consumer brands there was little role for live chat or call support and that it had automated a lot of things, as VCCircle reported. On 10 July 2023 he tweeted that Dukaan had to lay off 90% of its support team because of its AI chatbot, calling the decision tough but necessary, and said the in-house AI assistant had cut response and resolution times and support costs by about 85%. He told CNN that the 23 layoffs were made in September. When asked online what had happened to the dismissed staff, he said he would describe their assistance on LinkedIn. No dismissed employee's account was found, and whether the chatbot was in use when the 2022 cuts were made is not established.

AI system
Lina (Dukaan AI assistant)
Occurred
Sept 2022
Reported
21 September 2022
Event location
Unknown
What the AI did
Relation unknown
Reported harm
Professional Harm
Whose AI use
An institution’s AI use
Setting
Work
Evidence
AI involvement reported · Causal attribution alleged · 4 sources
5 claims: 5 reported. 4 open questions
People reported harmed
23 people

AI system as recorded: Lina, Dukaan's in-house AI customer-support assistant built by the company's lead data scientist, which the CEO said answers generic and account-specific customer questions

What Happened

September 2022. VCCircle reported on 21 September 2022 that Dukaan had laid off 23 employees, quoting a tweet by founder Suumit Shah: "This week, we had to let go of 23 employees from the team." Shah's explanation on Twitter was that, since the company shifted its focus from the small kirana and small-business segment to enterprises and direct-to-consumer brands, "there wasn't much of a role for live chat or call support, and on thetech front, we automated a lot of things". The report does not mention a chatbot.

July 2023. On 10 July 2023 Shah tweeted: "We had to lay off 90% of our support team because of this AI chatbot. Tough? Yes. Necessary? Absolutely." In the thread he said the company's lead data scientist had built an AI assistant that answered generic and then account-specific customer questions, and that resolution times had fallen sharply. He told CNN that the 23 layoffs were made in September and that, by introducing the technology, the company had cut the cost of its customer-support function by about 85%. CNN noted that at the time he had told VCCircle that the shift to consumer-facing brands also contributed to the cuts.

Response. Twitter users accused Shah of celebrating the layoffs in public. When one asked what had happened to the dismissed staff, he said he would talk about the assistance provided to them on LinkedIn, writing that on Twitter people look for profitability, not sympathy.

Reported harm

Twenty-three Dukaan employees lost their jobs in September 2022; in July 2023 the CEO said 90% of the support team was laid off because of the company's AI chatbot, although his explanation at the time cited a business shift and automation.

Outcome

Resolved

The 23 employees were let go in September 2022. In July 2023 the CEO said support costs had fallen by about 85% and that the company was still hiring for other roles; he said assistance to the dismissed staff would be described on LinkedIn, and that post was not retrieved. No legal claim or regulatory response is reported.

What remains unknown

  • Whether the AI chatbot was in use when the September 2022 layoffs were decided.
  • Whether all 23 dismissed employees were support staff.
  • What assistance, if any, the dismissed staff received.
  • Where the dismissed staff worked; no dismissed employee's account was found.

What the evidence supports

AI involvement: reported. This is a consequential response to a decision to adopt AI. The employer's chief executive tweeted in July 2023 that Dukaan had to lay off 90% of its support team because of its AI chatbot and described the in-house assistant that took over customer queries. No AI output or action toward the dismissed staff is described. His explanation in September 2022 cited a shift in customer segment and general automation without mentioning a chatbot, so whether the chatbot drove the 2022 decision rests on his later statement alone.

5 claims: 5 reported. What the statuses mean

Reported In September 2022 the Dukaan founder tweeted that the company had let go of 23 employees that week, saying that after its shift to enterprise and direct-to-consumer brands there was little role for live chat or call support and that it had automated a lot of things.

Causal attribution. The CEO's contemporaneous explanation; it does not mention a chatbot.

  • vccircle.com(opens in new tab) supports · English
    'we had to let go of 23 employees from the team'; 'there wasn't much of a role for live chat or call support, and on thetech front, we automated a lot of things'
Reported On 10 July 2023 the CEO tweeted that Dukaan had to lay off 90% of its support team because of its AI chatbot, calling it tough but necessary.

Causal attribution. The employer's own later attribution of the layoffs to the AI chatbot; one origin (the CEO's tweets).

  • tbsnews.net(opens in new tab) supports · English
    'We had to lay off 90% of our support team because of this AI chatbot. Tough? Yes. Necessary? Absolutely,'
  • fortuneindia.com(opens in new tab) supports · English
    'Shah claims it was "tough" but "necessary" to sack 90% of the support staff.'
  • edition.cnn.com(opens in new tab) supports · English
    'laid off 90% of his support staff after the firm built a chatbot powered by artificial intelligence that he says can handle customer queries much faster than his employees'
Reported The CEO told CNN that the 23 layoffs were made in September, and CNN noted that at the time he had told VCCircle that the shift to consumer-facing brands also contributed.

Causal attribution. Links the July 2023 attribution to the September 2022 layoffs.

  • edition.cnn.com(opens in new tab) supports · English
    'Shah told CNN Wednesday that the 23 layoffs were made in September. At the time, he told Indian investment publication VCCircle that Dukaan’s shift away from smaller businesses to consumer-facing brands also contributed to the job cuts'
Reported The CEO said the in-house AI assistant answered customer queries faster and that introducing it had cut customer-support costs by about 85%.

Causal attribution. Employer's own claims about the system; not independently verified.

Reported Asked online what had happened to the dismissed staff, the CEO said he would talk about the assistance provided to them on LinkedIn.

Causal attribution. The CEO's reply as reported.

  • fortuneindia.com(opens in new tab) supports · English
    'When another Twitter user asked as to what happened to the 90% of staff that was fired, Shah said he will talk about the assistance provided to the laid-off staff on LinkedIn.'

Sources

4 sources inspected. Sources that repeat one account do not corroborate each other.

How the sources were read, and where the events happened

Read in English on 2026-10-26 (HTTP 200, full article body). Applies to s1, s2, s3.

Read in English on 2026-10-26 (HTTP 200, full article body, including the embedded tweet text). Applies to s4.

Event countries: Unknown. Affected-person countries: Unknown. Court countries: Unknown.

CNN describes Dukaan as Bangalore-based, but no source says where the dismissed support staff worked; the company's base is not treated as the event location.

Reviewed for publication 2026-10-26: Published as a consequential response to a decision to adopt AI: the employer's chief executive publicly attributed the layoff of 90% of the support team to the company's AI chatbot. His earlier explanation, which cited a business shift and general automation, is kept beside the later attribution, and the chatbot's role in the 2022 decision is left unestablished.

People described

23 Dukaan employees laid off in September 2022, described by the CEO in July 2023 as 90% of the company's support team

People reported harmed in this case

23 people

0 AI participants · 23 other people harmed

The CEO's September 2022 tweet (VCCircle) says 23 employees were let go, and he told CNN in July 2023 that the 23 layoffs were made in September. No other dismissals are counted. None of the 23 is counted as a direct AI user.

Counted once within this case. The same person may appear in other cases. This count does not establish AI causation.

Tags

#employment#layoff#customer-support#chatbot#ai-replacement#consequential-response#employer-statement

Cite this case

Compiled per our published methodology: verification statuses, sourcing standards, and corrections process.

APA

NOPE. (2026). Dukaan CEO said the e-commerce startup laid off 90% of its support staff because of its AI chatbot; at the time of the 2022 cuts he cited a business shift. AI incidents. https://nope.net/incidents/2022-dukaan-ceo-said-startup-laid-off-90-percent-of-support-staff-because-of-ai-chatbot-after-citing-business-shift-at-the-time

BibTeX

@misc{2022_dukaan_ceo_said_startup_laid_off_90_percent_of_support_staff_because_of_ai_chatbot_after_citing_business_shift_at_the_time,
  title = {Dukaan CEO said the e-commerce startup laid off 90\% of its support staff because of its AI chatbot; at the time of the 2022 cuts he cited a business shift},
  author = {NOPE},
  year = {2026},
  howpublished = {AI incidents},
  url = {https://nope.net/incidents/2022-dukaan-ceo-said-startup-laid-off-90-percent-of-support-staff-because-of-ai-chatbot-after-citing-business-shift-at-the-time}
}

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