Two million people in the Philippines work in call centers. Soon, they may be replaced by AI.

AI has impacted call centers more than just about any sector of the economy so far. AI systems are already answering most inquiries at some major companies.

How long until these workers will be out of a job?

The AI Wave

There are few countries more dependent on call centers than the Philippines.

At 2:00 am, Manila’s streets are full of workers on their “lunch break”. Huge sections of the population set their clocks to America.

The call center industry has been good to the Philippines. Millions of workers have found higher wages and job security.

But now, AI is threatening that progress.

Call centers are rapidly installing AI systems. And the layoffs have already begun.

AI could decimate the Philippines’ call center industry.

Klarna already has an AI system answering 2/3rds of customer service inquiries. If that becomes the norm, call centers could be a thing of the past.

Specializing for Superior Performance

Today’s general purpose customer service bots are only the beginning. I’m meeting tons of startups that are building specialized agents that will outperform today’s generalist tools.

I’ve seen products for car dealerships, dentist’s offices, and more. These products are attuned to the exact questions that come up in these businesses.

That will allow them to blow away today’s AI bots. That means even more job losses in customer service.

The Limitations of AI

To replace humans, AI needs to do more than just answer questions. It needs to take actions.

I need AI to rebook my flight, send me a new credit card when I lose mine, or close my account. This will require AI agents, not just chatbots.

Today’s AI customer service tools mostly just answer questions. But tons of startups are building AI agents.

I expect to see powerful agentic systems within the next couple of years.

This leaves only the most extreme edge cases for humans to handle. Companies may keep 5-10% of their existing customer service staff to handle those.

Wrap-Up

AI is killing jobs in customer service. But it’s also creating new opportunities for workers in places like the Phillipines.

Some are training AI models. Others are becoming virtual assistants. Many of these jobs pay better than customer service.

For workers that improve their skills, AI is an opportunity. But those that don’t will soon be out of a job.

What’s happening in the Philippines today will be happening in the US soon. As AI tools get better, more complex jobs in developed nations will be at risk.

The best protection for workers is upping their skills.

How do you think AI will affect jobs?

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