Why did the IT-BPM sector ignore AI as a threat? We saw this coming in 2025.
That year, the US venture capital firm Andreessen Horowitz published a blunt pitch. It told AI startups to go after the business process outsourcing industry. The message was simple: BPO work was a huge market, much of it still depended on people, and AI could take a large share of it.
The warning was not hidden. It was not buried in a report that no one read. It was a public call to investors and founders. The article pointed to a global industry worth about $300 billion. The Philippines had around $38 billion of that market.
The pitch also listed the work most at risk. It included call centers, data processing, financial checks, IT support, and human resources. These were not small parts of the BPO sector. They were at its heart.
The case for change was easy to understand. Human workers can produce uneven results. They need training, managers, offices, benefits, and rest. AI agents can work all day. They can follow the same steps each time. They can also be copied and sent to new markets at low cost.
Of course, that sales pitch made AI sound more perfect than it was. AI made mistakes. It gave wrong answers. It struggled with hard cases and human emotion. But it did not need to be perfect to cause harm. It only needed to become good enough and cheap enough to replace part of a team.
At first, the damage was hard to see. BPO firms began using AI inside their own offices. They bought new software and asked workers to learn new skills. The industry still grew. Leaders pointed to new jobs as proof that the threat had been overblown.
That was a mistake. Early growth did not mean the danger was gone. It meant the change had not reached full speed.
The shift from basic BPO work to global capability centers, or GCCs, did provide some protection. GCCs handle higher-value work for global firms. Their teams may work in finance, software, data, research, design, and business planning. These jobs are often harder to automate than a simple customer call or data task.
The Philippines was right to seek more GCC investment. But GCCs were only a partial answer. They hired fewer people with deeper skills. A new center with well-paid analysts and engineers could not replace every call center seat lost across the country. GCC hiring was never going to offset losses in all BPOs.
We also knew that the market for automation was much larger than the work already sent overseas. Industry estimates said only about 30% of jobs that could be outsourced had actually been outsourced. AI companies did not have to steal only the jobs in Manila or Cebu. They could also stop future jobs from ever coming here.
That was the deeper threat. The Philippines could keep many current jobs and still lose the next wave of growth.
By then, AI firms were attacking both sides of the industry. Some focused on the front office, where workers spoke with customers. Others targeted back-office tasks. A third group built full AI services that could take over whole business processes.
BPO companies faced a clear choice. They could try to defend every old job, or they could update the jobs. They could sell labor by the hour, or become AI-powered service companies themselves.
That change required more than short training programs and speeches about resilience. Firms had to redesign their services. Schools had to teach judgment, communication, data skills, and AI use. Government had to help workers move before their jobs vanished, not after. The country needed honest measures of job loss, wage pressure, and tasks replaced by machines.
Looking back, the greatest failure was not that leaders failed to predict AI. The warning was already on the table in 2025. The failure was treating a direct threat as a distant idea.
Talking about BPOs and AI seem to be locked in a permanent air of denial. Time to smell the coffee. Time to drink it.
Dominic “Doc” Ligot is one of the leading voices in AI in the Philippines. Doc has been extensively cited in local and global media outlets including The Economist, Channel News Asia, South China Morning Post, Washington Post, and Agence France Presse. His award-winning work has been recognized and published by prestigious organizations such as NASA, Data.org, Digital Public Goods Alliance, the Group on Earth Observations (GEO), the United Nations Development Programme (UNDP), the World Health Organization (WHO), and UNICEF.
If you need guidance or training in maximizing AI for your career or business, reach out to Doc via https://docligot.com.
