Open doorSan Francisco-based online home-buying platform ends operations in India after less than two years expanding its presence in the country. The decision has become a flashpoint in the debate over whether artificial intelligence is beginning to change the economics of offshore work.
In announcing the decision On Wednesday, CEO Kaz Nejatian mentioned a push to bring operational work back to the US, where Opendoor’s customers are located, and a shift to smaller teams native to artificial intelligence. The company did not respond to requests for comment on how many employees were affected or how much of the decision was due to the effectiveness of artificial intelligence. But the announcement quickly gained traction across Silicon Valley, where founders, investors and outsourcing experts see it as an early example of how artificial intelligence is reshaping the economics that have made India a global hub for back-office operations.
To understand why they care, it helps to know what is at stake for India. It has evolved far beyond its roots as a destination for outsourcing back-office tasks. The country is now the the largest Global Capability Center market in the world — a term for dedicated offshore multinational units set up to handle everything from IT and finance to R&D — with more than 2,100 centers employing about 2.36 million people and generating nearly $100 billion in annual revenue.
Opendoor itself had built a large team in India to handle manual workflows on fragmented systems, Nejatian said. The company had nearly 250 employees in India when it opened offices in Chennai and Bengaluru in 2024. But the entire company has downsized in recent years. Securities filings show Opendoor employed 1,042 people worldwide at the end of last year, against 1,470 a year earlier. Similarly, its workforce outside the US fell to 184 employees at the end of last year, compared to 342 employees at the end of 2024.
These broader workforce reductions make it difficult to view the shutdown in India solely through the lens of outsourcing. Opendoor is cutting costs across the business after a tough period in the US housing market hit online home buying companies particularly hard. But the language Nejatian used to explain the move resonated with investors and outsourcing analysts who see AI reshaping the way companies organize business work.
Some investors saw the decision as a sign of what artificial intelligence could mean for India’s vast workforce. “As manual labor is replaced by artificial intelligence, many jobs will be lost in India.” he wrote Sheel Mohnot, co-founder of Better Tomorrow Ventures.
Others saw Opendoor as evidence of a larger shift in the way companies are organized. Keshav Lohia, venture capitalist at Emergent Ventures, is described the decision as a “watershed moment” for AI-based operations, arguing that advances in AI are beginning to challenge the cost-arbitrariness model that made India a popular destination for offshore companies.
Phil Fersht, managing director of HFS Research, a consultancy that tracks the global outsourcing and business services industry, told TechCrunch that the growth should not just be seen as jobs moving from India to the US.
“This is not an isolated restructuring,” Fersht said. “It’s part of a much broader pattern that we’re starting to see as companies redesign operations around artificial intelligence, automation and much leaner workflows.”
Fersht argued that the winners would be companies that combine artificial intelligence, software and human expertise to deliver results without constantly adding workers, a model he described as “Software as Services.” While Opendoor may be one of the first high-profile examples, he said it is unlikely to be the last.
Some investors are already expanding beyond individual companies. Varun Rekhi, venture capitalist at Speedinvest, he argued that if AI reduces demand for labor-intensive services, it could eventually squeeze one of India’s major export industries, which relies on supplying talent and know-how to global companies.
For now, Opendoor remains a complicated case study — a company that has been downsizing widely for years, and whose exit from India may say as much about its own struggles as it does about the future of artificial intelligence and offshore work.
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