Outsourcing workers in the Philippines face layoffs due to AI

On August 4, 2026, reports from Filipino workers showed that the adoption of artificial intelligence (AI) has already caused layoffs in outsourcing companies. A former employee, who requested anonymity and was identified as Lisa, said that after training the AI with her writing style, she saw her position eliminated a few months later.

AI-related layoffs

Lisa worked at a public relations agency that was tasked with producing AI-generated material, which she and her colleagues were required to review. According to her, the very experience of training the artificial intelligence ended up replacing her role, and she described the situation as "I felt I was digging my own grave".

Other former employees, also anonymous, confirmed that they were dismissed after short contract periods, despite having signed confidentiality agreements in exchange for severance. These accounts highlight the concern that automation could replace jobs that have historically propelled the Filipino middle class.

The scale of the outsourcing sector

Outsourcing in the Philippines employs about 1.9 million people and generates roughly US$ 40 billion in annual revenue, representing about 10 % of the national economy. Since the early 2000s, the country has been promoted as an English-language alternative to the Indian model, attracting multinationals such as Accenture, Concentrix and Teleperformance, which have established large campuses in areas like Cubao in Manila.

AI integration into the business model

Jack Madrid, president of the Philippines IT and Business Process Association (IBPAP), acknowledged that AI is being incorporated into the sector, stating that "AI agents have the potential to automate at a much faster pace". According to him, although there is a layer of functions susceptible to automation, most affected workers have been redeployed within the same organizations.

Companies such as Teleperformance state that AI will be used to handle routine interactions, allowing human agents to take on more complex tasks. Accenture says AI will transform almost all functions, but promises to invest billions in AI capabilities and staff training. Concentrix, the country's largest outsourcing firm, assures that its AI systems will remain under human supervision and that it will provide training to employees.

Reskilling challenges and government responses

Paul Quintos, from the University of the Philippines-Diliman, noted that pressure from foreign clients to adopt AI acts as a cost-cutting measure, creating insecurity among local managers. He also emphasized the lack of concrete evidence on productivity gains resulting from AI tools.

Leandro Aguirre, of the Philippines Department of Information and Communications Technology, said the country needs to accelerate reskilling efforts. The government has pledged to train more than 300 thousand outsourcing workers, while also recognizing the need to rethink the economic model that heavily relies on foreign direct investment.

Outlook for workers

The International Labour Organization estimates that 12.7 million Filipinos – more than a quarter of the workforce – hold jobs vulnerable to generative AI, the highest proportion in Southeast Asia. While IBPAP observes that many positions will be transformed rather than eliminated, the reality of recent layoffs shows that the transition can be abrupt for some.

Local unions have yet to secure consolidated representation in the sector, and existing labor laws provide little guidance on the introduction of AI in workplaces. According to Aguirre, the expectation is that AI benefits will be broadly distributed, not limited solely to employers.

In summary, AI is reshaping the outsourcing landscape in the Philippines, bringing both productivity-boosting opportunities and risks of displacing workers who have historically underpinned the country's economic growth.

With information from BBC News.