Inflation is a pervasive economic force that can significantly impact industries and job markets, including the customer experience (CX) industry.
Even though, we expect to see even more job losses in the customer service sector as inflationary pressures continue to mount.
For example, Amazon announced that it will cut more than 18,000 jobs, citing economic uncertainty. Frontier Airlines recently closed its call center as a cost-cutting measure.
JPMorgan economists think inflation could lead to a recession pushing the unemployment rate to nearly 5%, reversing more than a year of job growth. It stands to reason that customer service jobs are not immune to inflationary pressures.
Reasons Companies Are Cutting Customer Service Jobs
There are several reasons a company may decide to cut jobs in response to inflation:
Inflation can lead to increased costs for businesses, such as higher prices for raw materials or higher employee wages.
Profit Margin Pressure
If a business can’t pass on the increased costs associated with inflation to customers through higher prices, it may experience pressure on profit margins.
Customer spending during periods of recession and inflation reduces drastically as people turn to saving for a rainy day, resulting in significantly lower demand for goods and services.
Changes in the Economy
Inflation can also be a symptom of broader economic changes, such as a recession or shift in consumer preferences.
Increased Need for Automation to Fill the Void
As we lose customer service jobs to inflation, we see an increased need for automation technologies to help fill the void. Yet, while technologies like are up to the task, it’s essential to ensure that there are still enough human representatives available to provide a high level of service.
CX professionals should not view automated systems as replacements for human agents but as assistive technologies, taking full advantage of the benefits a blend of both can offer.
Interactions believes in the power of human intelligence plus AI-enabled automation to provide the highest-quality customer experience. Download our latest whitepaper; Inflationary Pressures Are Driving CX Job Cuts, to learn more.