Contact Center Pipeline January 2026 | Page 37

Few issues around AI adoption have understandably been as hotly debated as to whether the technology will lead to workforce reductions, including in the contact center. So, we posed two related questions to Vigneshwaran Jagadeesan Pugazhenthi.

1. IS IT TRUE THAT WORKFORCE REDUCTION IS THE PRIME REASON WHY THE C-SUITE IS INTERESTED IN AI? AFTER ALL, IS IT NOT SIMPLER, ACHIEVE RESULTS FASTER, AND ULTIMATELY MORE PROFITABLE TO LAY OFF OR NOT HIRE STAFF THAN TO GROW REVENUES, ESPECIALLY IN AN UNCERTAIN ECONOMY?

“ It’ s true that workforce reduction is often a key driver behind C-suite interest in AI, especially in uncertain economic times where controlling costs is critical,” says Vigneshwaran.“ Automating routine tasks and increasing call containment through AI can lead to fewer agents being needed, which offers immediate cost savings and improves profitability.

“ However, the story doesn’ t end there. Smart organizations recognize that AI’ s real value lies not just in cutting headcount but in enhancing CX and driving revenue growth through more personalized, efficient interactions.

“ So, while workforce optimization is a prime motivator, most forward-thinking leaders see AI as both a cost and revenue lever, not just a tool for downsizing.”

2. SO, HOW MUCH IMPACT DO YOU BELIEVE AI ADOPTION WILL ACTUALLY HAVE ON THE SIZE OF, AND SKILLS NEEDED FROM THE CONTACT CENTER WORKFORCE?

• NOTING THE SHIFT OF SPENDING FROM LOWER / MIDDLE-INCOME 90 % OF CONSUMERS TO THE 10 % ELITE BUYERS( AKA K-SHAPED ECONOMY): WHO ARE ALSO OFTEN TECHNOLOGY FIRST-ADOPTERS?

• NOTING ALSO THAT THE MARGINS FOR COVERING OVERHEAD COSTS, LIKE FOR AGENTS, ARE LESS FOR LOWER-TIERED PRODUCTS AND SERVICES AND CONVERSELY GREATER FOR HIGHER-TIERED ONES?

“ AI adoption will certainly impact both the size and skills of the contact center workforce, but the exact extent remains to be seen,” says Vigneshwaran.“ With the current economic uncertainty and slow growth, companies will be cautious about workforce expansion.

“ Additionally, as spending shifts towards the top 10 % of elite, tech-savvy consumers, contact centers will need to cater more to their sophisticated expectations.

“ For lower-tier products and services, where margins are tighter, AI-driven automation will likely drive greater call containment and reduce the need for large human teams.

“ Conversely, higher-tier services, which have better margins and serve demanding customers, will require highly skilled agents who can handle complex and nuanced interactions, supported by AI tools.

“ In summary, AI will likely shrink the overall size of the workforce in cost-sensitive segments while increasing demand for advanced skills in premium segments, creating a more specialized and efficient contact center landscape.”

BOX 1

AI APPLICATION USAGE

GIVEN WHAT YOU SAID, DOES AI CHANGE CONTACT CENTER SOFTWARE AND IF SO, HOW? WHAT DOES IT ADD OR REPLACE? DOES AI ALTER HOW THESE PROGRAMS OPERATE? INCLUD- ING HOW CONTACT CENTER AGENTS USE THEM AND HOW CUSTOMERS ENGAGE WITH THEM THROUGH SELF-SERVICE?

A: Absolutely. AI is fundamentally reshaping the future of contact centers. At its core, a contact center is all about CX: and AI brings a transformative potential to elevate that experience.

Traditionally, IVR systems have been rule-based and standardized, offering limited flexibility and failing to deliver truly conversational interactions. Customers often end up navigating rigid menus that don’ t reflect the intent behind their calls.

AI changes that by enabling more natural, context-aware, and dynamic conversations. Technologies like natural language processing( NLP) and machine learning allow IVRs and digital assistants to understand intent and engage in human-like dialogs, dramatically improving self-service capabilities.

From the agent’ s perspective, AI augments their role rather than replacing it. It can surface relevant customer profiles, suggest next-best actions, and even assist in responding while back-end systems are still loading. This not only improves productivity, but it also enables more personalized and informed conversations: something that directly impacts customer satisfaction and loyalty.

So yes, AI does change how contact center software operates-- both in how systems interact with customers-- and how agents use them. The result is a more intelligent, efficient, and customer-centric contact center.

HOW DO YOU SEE AI BEING EMPLOYED IN CONTACT CENTER SOLUTIONS? ADDED TO AND / OR BOLTED ONTO EXISTING PRODUCTS? OR IN A NEW CLASS OF AI-FROM-THE-GROUND-UP SOLUTIONS?

A: AI is quickly becoming embedded across the entire end-toend flow of modern contact centers. Traditionally, AI started with add-ons to existing systems, for example enhancing IVR with natural language capabilities or adding sentiment analysis to QA tools.

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