Companies are increasingly turning to workers who are abroad to replace laid off U.S. employees. For example, Google recently cut hundreds of core workers and moved jobs to India and Mexico.
To find out if companies are replacing laid off U.S.-based employees with offshore employees, in July, ResumeBuilder.com surveyed 600 business leaders involved in decisions to terminate employees at companies that had layoffs in the past year.
Key findings:
- 30% of companies with recent layoffs replaced laid off U.S. employees with offshore workers
- 24% of companies with recent layoffs plan to terminate and replace U.S. employees with offshore workers in 2025
- Customer service, tech positions were most likely to be taken over by offshore workers
- A quarter of companies that engaged in this practice replaced 50% or more of laid off U.S. employees
3 in 10 Companies With Recent Layoffs Replaced Laid Off U.S. Employees With Offshore Workers
In the past year, 30% of companies that had layoffs (or 19% of all companies) replaced laid off U.S. workers with offshore workers. In contrast, 63% report that they did not engage in this practice, while 7% of respondents were unsure.
Furthermore, of the companies we surveyed that had layoffs in the past year, 24% say they already plan to lay off U.S. workers and replace them with offshore workers in 2025.
Customer service, tech positions were most likely to be affected
The roles most commonly affected were customer service (58%) and tech positions (49%). Other notable roles where U.S. employers were replaced by offshore workers included data entry (47%), digital marketing (41%), and manufacturing (40%). Virtual assistant (39%) and sales (39%) roles also had replacements.
“Organizations opting to lay off workers and replace them with offshore employees are targeting roles that can be easily managed remotely, such as customer service, tech support, and data entry positions. Offshore workers live in countries where they have been working globally for years, so there is an existing experienced workforce in place,” says Chief Career Advisor Stacie Haller.
“Historically, many companies have filled these positions offshore due to cost benefits. However, the current trend represents a new level of outsourcing, where layoffs of U.S. employees are being used as a cover for replacing them with a lower-cost workforce abroad. By doing so, they can maintain or even improve efficiency while significantly reducing expenses.
“However, this approach raises ethical concerns and can impact employee morale, trust, and the overall perception of the company’s commitment to its domestic workforce.”
One-Quarter of Companies Replaced 50% or More Laid Off U.S. Employees With Offshore
Among companies that replaced laid off employees with offshore workers, 22% indicated that 1% to 10% of the laid off employees were replaced. About 29% reported that 11% to 25% were replaced, while 24% stated that 26% to 50% were. Additionally, 17% indicated that 51% to 75% of the laid off employees were replaced with offshore workers, and 9% reported that 76% to 100% of the laid off employees were replaced.
Cost savings tops reasons for replacing U.S. employees
The primary reason companies replaced laid off U.S. workers with offshore employees was cost savings (74%). About 60% noted flexibility in scaling their workforce, and 59% mentioned increased productivity. Access to specialized skills was also a significant factor, reported by 59% of respondents.
“The trend of organizations lacking transparency in their hiring practices and workforce management is increasingly impacting company morale and trust. When employees feel they or their coworkers are being replaced under the guise of cost savings, it inevitably erodes their commitment and trust in the company. This kind of approach fosters a culture of fear and uncertainty, as employees worry about being replaced while other reasons are given for workforce changes.
“Employees are unlikely to remain loyal to or recommend companies they perceive as unethical. This can severely hamper an organization’s ability to attract and retain talent in the future, as prospective employees will be wary of joining a company known for such practices. To maintain a motivated and committed workforce, organizations must prioritize transparency, fairness, and ethical treatment of their employees,” says Haller.
Methodology
This survey, launched on July 22, 2024, was commissioned by ResumeBuilder.com and conducted online by the polling platform Pollfish. Overall, 600 business leaders completed the survey.
To qualify for the survey, all participants had to be over 25, have a household income of at least $75,000, have an education level above high school, have a manager-level role or higher, and work at a company with more than 10 employees.
Respondents also had to indicate they are involved in termination decisions and their company has had layoffs in the past year via screening questions.
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