Opendoor’s India exit is fueling a larger conversation about AI and outsourcing

Opendoor, the San Francisco-based online home-buying platform, is shutting down its Indian operations less than two years after expanding its presence in the country. The decision has become a hot topic in the debate over whether AI is beginning to transform the offshore work economy.

In announcing the decision on Wednesday, CEO Kaz Nejatian pointed to a push to bring work back to the US, where Opendoor’s customers are located, and to shift to smaller AI teams. The company did not respond to requests to comment on how many employees were affected or how much of the decision was driven by AI efficiency. But the announcement quickly gained traction across Silicon Valley, where founders, investors, and outsourcing experts saw it as an early example of how AI is reshaping the economy and making India a global hub for back-office operations.

To understand why they care, it helps to know what is at stake with India. It has moved beyond its roots as a destination for outdoor office activities. The country is now the world’s largest Global Capability Center market – the name for overseas units established to handle everything from IT and finance to R&D – with more than 2,100 centers employing approximately 2.36 million people and generating revenues of nearly $100 billion annually.

Opendoor itself has built a large team in India to manage manual workflows across the various systems, Nejatian said. The company had around 250 employees in India when it opened offices in Chennai and Bengaluru in 2024. But the entire company has been in decline over the years. Security filings show that Opendoor employed 1,042 people worldwide at the end of last year, compared to 1,470 the year before. Similarly, its non-US workforce fell to 184 employees at the end of last year, compared to 342 employees at the end of 2024.

Those broad layoffs make it difficult to view India’s shutdown solely through the lens of outsourcing. Opendoor has been cutting costs across the business after a difficult period in the US housing market has hit online real estate companies particularly hard. Still, the language Nejatian used to describe the move struck a chord with investors and outsourcing analysts who see AI reshaping the way companies organize work.

Some investors saw the decision as a sign of what AI could mean for India’s many outsourced workers. “As manual labor is replaced by AI, many jobs will be lost in India,” writes Sheel Mohnot, founder of Better Tomorrow Ventures.

Others viewed Opendoor as evidence of a radical change in the way companies are organized. Keshav Lohia, venture capitalist at Emergent Ventures, described the decision as a “watershed moment” for AI-driven jobs, saying AI advances are beginning to challenge the arbitrage model that made India a popular fishing destination.

Phil Fersht, CEO of HFS Research, a consulting firm that tracks the commercial and business industry, told TechCrunch that these developments should not be seen as jobs moving from India to the US.

“This is not a one-off restructuring,” Fersht said. “It’s part of a much broader pattern that we’re starting to see as companies reinvent operations around AI, automation, and agile workflows.”

Fersht argued that the winners will be companies that combine AI, software and human technology to deliver results without continuing to add significant value, a model he described as “Services-as-Software.” While Opendoor may be one of the first high-profile examples, he said it is unlikely to be the last.

Some investors are already pulling money out of individual companies. Varun Rekhi, a venture capitalist at Speedinvest, said that if AI reduces the need for labor-intensive services, it could end up squeezing one of India’s most important export industries, built to supply talent and expertise to global companies.

For now, Opendoor remains a complicated case study — a company that has been downsizing for years, and its exit from India may say as much about its problems as it does about the future of AI and overseas work.