December 2025 Industry Trends

From scale to substance: How outsourcing reinvented itself.

Executive Summary

By December 2025, the IT-BPM and BPO industry shifted from scale to substance. It was no longer about hiring large numbers of talent or offering the most cost-effective service.

This time, delivering value mattered most, for clients wanted more than efficiency. They wanted clear results, reliable services, and responsible business practices.

What’s more, rapid AI adoption, talent shortage, infrastructure issues, and stricter regulations forced outsourcing providers to compete in new ways.

Several key changes defined this shift:

• AI moved from the experimentation stage to enterprise-wide deployment, which raised concerns about ROI, governance, and workforce impact.
• Skilled talent became harder to find, especially professionals with AI and industry expertise.
• Companies expanded their operations across more countries rather than relying on a single location.
• System reliability, power supply, and infrastructure (aka operational resilience) became top management concerns.
• Employee well-being and sustainability started to directly affect service quality and client trust.

AI as the Catalyst: From Simple Automation to Smarter Operations

Artificial intelligence (AI) became the biggest force that transformed outsourcing throughout 2025. It had been built and used across service delivery, customer experience, analytics, and internal operations. Outsourcing providers that leveraged it effectively and responsibly would gain a competitive advantage.

Larger global outsourcing providers partnered closely with leading AI firms to integrate AI into their delivery platforms. This meant automation could do more than repeat tasks. It could help make decisions, personalize services, and improve processes in real-time.

As a result:

• Call centers became smarter customer experience hubs.
• Back-office operations shifted toward data and insights.
• Industries such as healthcare, finance, and insurance chose to work with providers with AI capabilities and deep industry expertise.

But the acceleration of AI adoption also exposed new challenges, such as:

• Clients wanted clear proof of AI’s return on investment (ROI).
• Governance and risk management became more important as AI faced more regulation.
• Workforce redesign became unavoidable as human-AI roles expanded and repetitive roles declined.

Workforce Disruption: Fewer Entry-Level Jobs, More Skilled Talent

Across IT-BPM and BPO firms and shared services centers, entry-level roles dropped sharply. This happened because AI and automation took over many repetitive tasks, pushing companies to focus on higher-value work.

Key workforce changes observed by December 2025 included:

• Contraction of junior roles: Simple, rule-based tasks were increasingly done by AI. Many entry-level jobs were reduced or merged with more senior responsibilities. Outsourcing providers now prefer a workforce that could handle complex, judgment-based tasks and could work alongside AI.
• Gen Z adaptation and AI anxiety: Younger workers had to learn new AI tools while worrying about job security over role displacement. What they need now are mentorship and flexible career paths.
• Upskilling and inclusion initiatives: Outsourcing providers invested in hiring neurodiverse talent, inclusive customer experience training, and digital academies because they recognized that workforce quality and engagement lead to better service.

As this trajectory continues, productivity would no longer rely on a large headcount to be considered efficient and effective. Instead, it would be measured by the strategic value a handful of employees can deliver to the clients.

Global Delivery Re-architected: Prioritizing Diversification

Risk, talent shortages, and global uncertainty had pushed outsourcing providers to stop relying on a single country.

Before, work was concentrated in hubs like the Philippines, India, and parts of Eastern Europe; now, operations are distributed across different places. They do this to achieve three main goals:

• To mitigate operational risk: They avoided relying on a single location. Sufficient power supply, political stability, and disaster preparedness became key factors in selecting new sites.
• To find new talent: They were considering Tier-2 Indian cities (Vizag, Mangaluru, Pune, Andhra Pradesh) and parts of Africa (Kenya, Nigeria, South Africa, Morocco) for their cost efficiency, multilingual skills, and younger workforce.
• To move work closer to clients: They sought to meet U.S. and European clients’ demands for nearshore locations that enabled easier communication, compliance with local rules, and greater operational transparency.

This re-architecture reflected a higher bar for resilience. Outsourcing providers now plan for multiple data centers, talent, and AI-enabled operations across different hubs to achieve a more agile and safer global delivery model.

Regional Strategy Comparison

The Philippines in 2025: Resilient, But Infrastructure-Constrained

The Philippines remained one of the world’s best places for BPO and IT work. The industry grew by about 5%, made almost $40 billion, and employed around 1.9 million Filipinos by the end of 2025.

However, IT-BPM and BPO leaders, especially those in healthcare and finance, raised their concerns over the power supply. Cebu, in particular, experienced intermittent power shortages that threatened the 24/7 operational continuity of outsourcing firms. If left unaddressed, it could escalate to a business risk.

There was also an increased demand for office spaces, with many local and foreign outsourcing providers preferring an office setup and expanding operations. Thankfully, the country’s office market was able to meet this demand, and along with government support, the industry could remain competitive and move into its next stage of growth.

Other than these, the Philippines should develop a more reliable infrastructure and continue to invest in talent upskilling and advanced technology.

Consolidation as Strategy: Buying Speed, Scale, and Capability

Large IT-BPM and BPO providers made their final push in 2025 to merge, acquire, or partner with leading AI firms to quickly gain the technology, talent, and experience clients were seeking. Such moves were part of their long-term strategy, which enabled them to scale faster, reduce risk, and remain competitive in this digital transformation.

Major Acquisitions of December 2025

Beyond technology, these deals also focused on industry-specific capabilities, particularly in healthcare, banking, finance services, and insurance (BFSI), and legal services. With these, outsourcing providers can offer specialized end-to-end solutions to clients on top of the basic work.

Work Models Under Pressure: RTO, Trust, and Burnout

It became more apparent that workforce experience became a major factor in keeping people and delivering quality services to clients.

As a result, outsourcing providers struggled to balance employee well-being, client expectations, and operational efficiency.

The key trends that defined this situation included:

• Return-to-office (RTO) mandates backfired: Remote and hybrid work setups influenced the workforce’s desire for flexibility. Outsourcing providers’ attempts to enforce RTO were often met with resistance. Even if employees followed it, the strict RTO policies hurt trust and productivity.
• Workplace surveillance hurt morale: Tracking employees too closely made them feel distrusted, which lowered engagement and affected service quality.
• Burnout became widespread: Outsourcing providers, particularly in the U.S. and Europe, increasingly realized how heavy workloads contribute to their workforce’s fatigue and affect their mental health. If this continued, it could lead to unstable operations.

Outsourcing providers should put forward flexible work options, supportive policies, and mental health support to maintain reliable, high-quality service delivery.

Vertical Outsourcing: Industry Expertise Wins

Clients increasingly began looking at IT-BPM and BPO providers specializing in their industry. They wanted providers who understood their business and the industry they’re in.

• Healthcare and life sciences: To support AI-driven research, virtual healthcare, and strict regulatory compliance, which requires technical and clinical expertise.
• Banking, financial services, and insurance (BFSI): To process risk management, compliance, and analytics in accordance with the industry rules and regulations (from the Basel Committee and APAC insurance).
• Legal and HR services: To understand and have hands-on practice with the region’s laws, policies, and compliance requirements.

If outsourcing providers wanted to win long-term, high-value contracts with clients, they must become subject matter experts—one who had:

• Industry knowledge
• Regulatory insight
• AI-enabled capabilities

Infrastructure, Energy, and Sustainability as Competitive Factors

Clients also began to care about how stable, reliable, and responsible an outsourcing provider’s operations were. This shifted the playing field among providers, as they now compete on their ability to keep services running during power outages, protect data, and operate sustainably.

The factors that influenced this trend included:

• Reliable energy and infrastructure became critical: Power shortages in fast-growing cities (like Cebu and similar hubs) exposed weak setups. Outsourcing providers with backup systems, stable energy sources, and clear contingency plans earned more client trust.
• Cloud and data centers became standard: Clients viewed secure data centers and cloud platforms as non-negotiable, as they were needed to keep systems online, protect data against cyberattacks, and support AI tools.
• Sustainability and responsible outsourcing became requirements: Clients began assessing outsourcing providers on their environmental, social, and governance (ESG) considerations. This includes energy efficiency, environmental and digital sustainability, and the responsible use of AI.

Infrastructure Resilience: Then vs. Now

Outlook for 2026: What Outsourcing Providers and Clients Can Expect

Outsourcing will become smarter, more resilient, and more AI-driven in 2026. Here’s what that means for both outsourcing providers and clients:

• AI will serve as a baseline, not a competitive advantage: Every provider will use AI. What will matter is how they use it—safely, responsibly, and alongside people to improve work and customer experience.
• Talent will still matter the most: Providers will compete for professionals who show AI literacy, multiple relevant skills, and industry-specific expertise. At the same time, they’ll implement measures to prevent burnout and keep employees engaged.
• Global delivery diversification will continue: Providers will further spread work across Africa, India, and nearshore locations to reduce risk, access diverse talent, and meet local regulations.
• Industry-specific expertise will become essential: Providers will deepen their understanding of specialized industries, especially in healthcare, BFSI, and legal.
• Sustainability and ESG will influence decisions: Providers will pay close attention to their corporate social responsibility, as clients look beyond cost and efficiency.

Logix BPO’s Closing Stance

As a leading BPO provider, we embrace the changes that shape global outsourcing. We aim to integrate AI, invest in our people, and focus on sustainable practices to deliver reliable, high-quality services that protect client outcomes.

In 2026, we will continue to seize opportunities to solidify our position as a trusted partner that provides responsible, future-ready outsourcing services and delivers measurable business value.