Will AI Help or Hurt Contact Center BPOs?

August 2026

CX and contact center industry leaders have discussed the demise of business process outsourcers (BPOs) for decades. Although the sector has experienced periodic downturns, it has proven to be resilient, and evidence suggests it will remain a strong and relevant vertical in the AI era. The current argument is that AI will significantly reduce the need for many human agents, leading some to assume that enterprise demand for BPO‑provided first‑ and second‑tier support will decline.

BPO leaders have shared with us that enterprise customers expected significant reductions in their human agent requirements throughout 2026 and 2027. However, these projections are not materializing. While there have been agent reductions attributed to AI initiatives such as conversational AI (CAI) self-service solutions, most enterprises are not realizing the staff reductions they expected. In some cases, enterprises that downsized their contact center workforce in anticipation of increased automation are now quietly rehiring to replace the agents they released. This is where contact center BPOs play a critical role, as they excel at rapidly supplying human agents to fill resource gaps when enterprises need to scale quickly.

The Data Tells a Different Story

The gap between AI expectations and reality continues to widen. A December 2025 Gartner survey found that only 20% of customer service leaders reduced headcount due to AI (source: Gartner Survey Finds Only 20% of Customer Service Leaders Report AI-Driven Headcount Reduction). In February 2026, Gartner projected that half of the companies that cut customer service staff will ultimately rehire by 2027. And, in a finding that should give every enterprise pause, Gartner also predicts that 50 percent of organizations will abandon efforts to reduce customer service workforce levels through AI altogether (source: Gartner Predicts 50% of Organizations Will Abandon Plans to Reduce Customer Service Workforce Due to AI).

AI is delivering measurable value, but not in the ways organizations initially anticipated. The impact is emerging in increased agent productivity and higher throughput, not mass layoffs. Most AI self-service deployments in contact centers today handle straightforward and repetitive tasks, including password resets, order status checks, and basic FAQ inquiries. Interactions requiring judgment, empathy, or complex problem‑solving still depend on skilled human agents, and BPOs remain a highly effective way to source and scale talent, particularly when rapid staffing ramp-up is required.

Bottom Line

AI will not eliminate the BPO industry. It will reshape it, as is the case for many business functions. BPOs that embrace AI as a complementary capability, integrate it into their operations, and evolve their business and pricing models will be well‑positioned for success. The BPOs that thrive during this period of technology and resource transformation will be those that adapt quickly and align their offerings with the evolving needs of their enterprise clients.