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Opendoor shuts India
Opendoor, the San Francisco-based online home-buying platform, announced it was shutting down its India operations less than two years after expanding there, citing a shift toward smaller AI-native teams and a plan to bring operational work back to the U.S. where its customers are.
“Opendoor’s India Exit Fuels Debate: Is AI Reshaping the Economics of Offshore Work”
The company said it had nearly 250 employees in India when it opened offices in Chennai and Bengaluru in 2024, and it later reported global headcount fell to 1,042 from 1,470 year-over-year while its non-U.S. workforce dropped to 184 from 342.
In its explanation, CEO Kaz Nejatian said the operational work belongs in the United States, and ThePrint reported that he wrote, “that’s where our operational work belongs.”
ThePrint also reported that Opendoor said it was providing transition packages including severance, outplacement services, and other resources, and that “A small subset of team members will stay on to complete the transition of key workstreams.”
AI reshapes outsourcing
The decision became a flashpoint over whether AI is starting to alter the economics of offshore work, with TechCrunch describing it as an early example of how AI is reshaping the economics that made India a global hub for back-office operations.
Silicon Valley investor Sheel Mohnot framed the move as a warning for jobs, writing, “As manual work gets replaced by AI, a lot of jobs will be lost in India.”
Keshav Lohia, a venture capitalist at Emergent Ventures, described the restructuring as a “watershed moment” for AI-driven operations, arguing that advances in AI are beginning to challenge the cost-arbitrage model that made India a popular offshoring destination.
Phil Fersht, chief executive of HFS Research, told TechCrunch that the shift should not be viewed simply as jobs moving from India to the U.S., saying, “AI is reducing the amount of operational labor companies require in the first place.”
What’s at stake next
Beyond Opendoor, the stakes described in the coverage center on India’s role as the world’s largest Global Capability Center market, with TechCrunch citing more than 2,100 centers employing about 2.36 million people and generating nearly $100 billion in annual revenue.
“Opendoor, the onlinehome-buying platformheadquartered in San Francisco, is ceasing its Indian operations less than two years after establishing a presence there”
TechCrunch said Opendoor’s India exit is being discussed as part of a broader shift in how companies organize operational work, and it quoted Fersht warning that the change is “part of a much broader pattern we are starting to see as companies redesign operations around AI, automation, and much leaner workflows.”
In the same reporting, TechCrunch said some investors are already extrapolating beyond individual companies, with Varun Rekhi arguing that if AI reduces demand for labor-intensive services, it could eventually pressure one of India’s most important export industries built around supplying talent and expertise to global corporations.
ThePrint added that Nejatian said the company’s decision was not a reflection of the performance of the India team, and he wrote, “I am grateful for their dedication and this decision is not a reflection of the quality of their work.”
