AI replacing offshoring

Signal Summary: Tech companies are swapping offshore teams for AI agents faster than you can say "cost savings," deepfakes are crashing the interview party with fake credentials, and staffing M&A has fallen off a cliff because nobody can agree on valuations anymore. Plus, when your employee torpedoes their own referral.

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^{P.S. I draw all cartoons on an iPad Pro with an Apple Pencil and Procreate.}

HERE’S WHAT HAPPENED LAST WEEK ↓

SIGNAL 1
AI agents are eating offshoring's lunch

The shift: Remember when offshoring was the ultimate cost-cutting move? Companies are now replacing those overseas teams with AI agents instead. We're watching a $250 billion industry get disrupted in real-time.

What's driving this:

• AI agents cost 90% less than offshore developers

• No time zone headaches or communication gaps

• Instant scaling without recruitment lag

The ripple effect: This isn't just about tech companies saving money. The entire BPO (business process outsourcing) model that built empires in India, the Philippines, and Eastern Europe is facing an existential threat. When routine coding, customer service, and data entry can be automated, the value proposition of "cheaper labor elsewhere" evaporates.

Signal → Strategy: Target BPO companies' former clients with AI integration services. They need staff who can manage AI tools, not just offshore teams.

Go deeper: American Staffing Association - AI vs Offshoring

SIGNAL 2
Deepfakes crash the hiring party

The threat: Recruiters are now facing deepfake candidates who use AI to fabricate everything - their appearance, voice, work history, even real-time interview responses. One recruiter caught a candidate whose lip movements didn't sync with their audio.

Plot twist: the person wasn't even real.

What's breaking:

• Sophisticated deepfakes pass initial screening calls

• Fake LinkedIn profiles with AI-generated work samples

• Real-time AI coaching during video interviews

The solution: Companies are fighting back with liveness detection (proving you're actually human), credential verification tools, and multi-stage authentication. But it's an arms race - as verification gets smarter, so do the fakes.

Signal → Strategy: Partner with identity verification vendors to offer bundled screening packages. Position as "deepfake insurance" for clients terrified of hiring ghosts.

Go deeper: HR Executive - Deepfakes in Hiring

SIGNAL 3
Staffing M&A deals have vanished into thin air

Dealmaking in staffing has cratered. Buyers and sellers can't agree on what anything's worth anymore.

The damage:

• M&A activity down significantly from previous years

• Valuation gaps between buyers and sellers at record highs

• Private equity interest cooling faster than last week's coffee

The disconnect: Sellers remember the golden years when staffing firms sold for 8-12x EBITDA. Buyers see an industry getting disrupted by AI, direct sourcing, and economic uncertainty. Nobody wants to budge, so deals die in due diligence.

The real problem: Without industry benchmarking standards, everyone's guessing at valuations. Your firm might be worth $10M or $3M depending on who's doing the math. Confidence evaporates, checkbooks stay closed.

Signal → Strategy: Focus on organic growth instead of acquisition dreams. Build proprietary tech and niche expertise that makes your firm acquisition-proof, not acquisition-ready.

Go deeper: Staffing Industry Analysts - M&A Benchmarking

RECRUITING CONFESSIONAL
When Your Employee Torpedoes Their Own Referral

Recruiting Confessional A weekly series featuring anonymous stories from recruiting and staffing professionals. Submit yours here.

The Setup: Candidate came through an employee referral - always the best source, right? Crushed the interview with me and the panel. Offer extended, everyone celebrating.

The Disaster: Plot twist nobody saw coming. The referring employee contacts me: "Hey, I just learned she completely fabricated her resume and LinkedIn. I can't support this referral anymore." Background check was still pending, but suddenly those minor red flags started glowing neon.

The Aftermath: Legal got involved immediately. Offer rescinded. Awkward conversations with everyone who interviewed her. The referring employee felt mortified. Trust issues all around.

Have a story? Submit it here

WEEKLY POLL

SHARE THE SIGNALS
3 people you should share these signals with:

1. Your IT director who's still pitching offshore development teams

2. That recruiter who thinks video interviews are foolproof

3. Your CFO considering selling the business at 2019 valuations