AT&T’s Onshoring Pledge Is a Direct Hit to Offshore Markets

On Oct. 29, FCC Chairman Brendan Carr publicly commended AT&T for pledging to bring its customer care roles back to the United States, according to a PhoneArena report. The headlines say AT&T is bringing its call centers home. The real story is bigger, and it lands on the outsourcing industry and the offshore markets that serve it.

By my estimate, AT&T’s outsourced customer care supports more than 10,000 positions in nearshore and offshore markets. How many of those jobs actually land in the U.S. is a different question.

A Global Vendor Network, Not a Few Call Centers

AT&T’s offshore customer care isn’t delivered from a handful of company-owned buildings. It runs through outsourcing partners. A 2017 union report identified 38 third-party call centers serving AT&T across eight countries, with the Philippines hosting the most, and much of that volume concentrated among roughly 10 major providers. Industry consolidation has since folded many of those vendors together, but the footprint still stretches across Latin America in markets such as Colombia, across Asia in the Philippines and India, and into Africa.

AT&T will likely keep this work outsourced. What changes is where it gets delivered. Vendors with U.S. capacity are positioned to win programs, while those with AT&T volume concentrated offshore will need to build domestic capacity or risk losing share.

AI Will Decide How Many Jobs Come Back

Those offshore positions will not translate one for one into new U.S. jobs. AT&T is expanding AI self-service, and every routine contact automated is a seat that never needs to be filled, onshore or off. The company can also gain efficiencies by consolidating vendors and sites and by moving volume into its existing captive U.S. centers before adding new outsourced capacity. In the end, AI may determine how many of these jobs actually return.

The BPO Math Isn’t All Bad

For the seats that do move, onshoring isn’t necessarily bad news for BPOs. A U.S. agent typically generates about $70,000 in annual revenue, compared with roughly $30,000 for the same role offshore. Revenue per seat more than doubles.

Margins move the other way. Offshore programs often run around 20% margins, while U.S. programs are closer to 10%. On those numbers, profit per seat goes from about $6,000 offshore to about $7,000 onshore. You might expect a wash. It may actually be a slight lift, as long as providers can recruit and retain U.S. agents at scale.

A Preview of the FCC’s Final Rule?

In March, the FCC adopted a Notice of Proposed Rulemaking on offshore call centers. It is a proposal, not a final regulation. It would cap the share of customer service calls handled abroad, with 30% floated as a threshold, require agents to disclose their location, give customers the right to transfer to a U.S.-based representative and set English proficiency standards. The proposals reach call centers operated by or under contract to carriers, which puts BPO vendors squarely in scope. Comments closed in June, and a final order is still pending.

So why move now? Nothing public confirms what the final order will say. But a carrier of AT&T’s size doesn’t restructure a global vendor network on a hunch. Moving early lets AT&T control the timeline, pick its vendors and markets, and earn goodwill with the regulator it depends on for approvals. Charter made the same move while its $34.5 billion Cox acquisition was under review. It’s fair to ask whether AT&T knows something the rest of the industry doesn’t.

Winners and Losers

U.S. markets gain jobs, but even a partial return will strain them. Returning seats will compete for the same experienced agents, pushing wages and attrition higher in markets already crowded with contact center demand. Turnkey call center space is scarce in many cities, and states and communities will compete hard for these projects.

Offshore markets take the hit. The Philippines, whose IT-BPM industry employs about 1.9 million people and earns roughly half its revenue from voice work, has the most at stake. India, Colombia and the rest of Latin America, and African delivery hubs are exposed too. If Verizon and T-Mobile follow, the impact multiplies.

The Right Answer Depends on the Work

None of this makes onshoring the right answer for every program. Offshore and nearshore delivery remain the best fit for a wide range of work, and regulation or politics alone shouldn’t drive a sourcing decision. The right footprint depends on the work being performed: its complexity, customer expectations and regulatory exposure, weighed against labor market depth, cost, provider capabilities and risk. For most companies, that analysis points to a blended model rather than an all-onshore or all-offshore one.

How SSG Can Help

For two decades, Site Selection Group has helped companies and BPO providers evaluate onshore, nearshore and offshore delivery by analyzing labor markets, cost, capabilities and risk, then negotiating incentives and executing the real estate. Unlike firms that also represent landlords or economic development groups, SSG represents only tenants, and we have no stake in where the work goes. To assess how the FCC’s onshoring push affects your footprint, contact Site Selection Group.