Uber is cutting 10% of its customer service workforce to simplify operations and embrace AI, Bloomberg first reported Wednesday.

In addition to the cuts to its community operations team, the ride-hailing company is requiring remote workers of the team to relocate to an Uber hub office.

The cuts are part of an effort “to simplify operations, strengthen in-person collaboration, and continue to embrace AI,” an Uber spokesperson told Bloomberg. 

Uber joins a growing list of companies that are laying off customer service workers and investing in AI. Salesforce, Verizon and Oracle all laid off members of their customer service teams in the past year as they pivoted to greater AI use. 

Forrester predicts that AI will slash the customer service workforce in half by 2030. The analyst firm expects contact centers handling customers’ lower-complexity inquiries will face the greatest reduction in staff, as AI can handle those queries well.

But in many instances, companies are not reducing headcount because they have seen such success in AI, but because they are trying to free up the funds to invest in the technology. In other cases, businesses are pointing to AI while right-sizing their business operations.

“This is part of a broader pattern,” Kathy Ross, a VP analyst at Gartner, said in an email. “We often see job reductions reported as driven by AI, when the story is more nuanced.”

Kate Leggett, VP and principal analyst at Forrester, says companies are using AI as an excuse for large layoffs.

“Companies are using AI to reduce headcount — perhaps they overhired during the pandemic; perhaps they need to realign spend to infrastructure and away from headcount,” Leggett told CX Dive in an email.

Megha Yethadka, VP of global community operations at Uber, said in a memo reported on by Bloomberg that the company needs to simplify its organization so it can use AI better. “We cannot scale frontier technology on top of fragmented processes.”

Comments like that indicate that the cuts are not all about the success of AI, Ross said. 

“It’s important to decouple Uber’s headcount reduction and current AI success: This seems more like a business restructuring decision to set themselves up for future AI success,” Ross said. “Uber is not alone in their need to get ready.”

CX Dive reached out to Uber for comment, but did not receive a response prior to publication. 

Time will tell how the cuts impact the quality of Uber's customer service.

In comments on Trustpilot, a customer review site, Uber’s customer service is frequently cited as a source of frustration.

While Leggett doesn’t know the particulars of Uber’s customer service organization, she understands what it takes to implement AI. 

“I know that there are fragmented processes, and data that need to be streamlined before you can take advantage of the benefits of AI,” she said. “Every AI project that I have visibility into starts with cleanup of technical debt, knowledge, data and process rework.”

Many companies won’t be able to implement AI successfully, Leggett said. They either cannot manage the organizational change or they don’t have clean, accessible data to build AI on. 

Those companies may end up rehiring the customer service representatives they laid off, Leggett said. “The poster child for this is Klarna.”

Klarna laid off customer service representatives, claiming their AI chatbot could do the work of 700 employees — only to rehire customer service representatives a year later. The buy now, pay later company began hiring for an “Uber type” customer service workforce last year but still claims its AI chatbot a success.