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Comment by strict9 | Hacker News Reader

As I have heard from mid level managers and C suite types across a few dev jobs. Staff are the largest expense and the technology department is the largest cost center. I disagree because Sales couldn't exist with a product but that's a lost point.

This is why those same mid level managers and C suite people are salivating over AI and mentioning it in every press release.

The reality is that costs are being reduced by replacing US teams with offshore teams. And the layoffs are being spun as a result of AI adoption.

AI tools for software development are here to stay and accelerate in the coming months and years and there will be advances. But cost reductions are largely realized via onshore/offshore replacement.

The remaining onshore teams must absorb much more slack and fixes and in a way end up being more productive.

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> The reality is that costs are being reduced by replacing US teams with offshore teams.

Hailing from an outsourcing destination I need to ask: to where specifically? We've been laid off all the same. Me and my team spent the second half of 2025 working half time because that's the proposition we were given.

What is this fabled place with an apparent abundance of highly skilled developers? India? They don't make on average much less than we do here - the good ones make more.

My belief is that spending on staff just went down across the board because every company noticed that all the others were doing layoffs, so pressure to compete in the software space is lower. Also all the investor money was spent on datacentres so in a way AI is taking jobs.

At a very large company at the momen: One of the things I've noticed is as translation has improved, C level preferences and political considerations have made a much bigger impact.

So we will reduce headcount in some countries because of things like (perceived) working culture, and increase based on the need to gain goodwill or fulfil contracts from customers.

This can also mean that the type of work outsources can change pretty quickly. We are getting rid of most of the "developers" in India, because places like Vietnam and eastern Europe are now less limited by language, and are much better to work with. At the same time we are inventing and outsourcing other activities to India because of a desire to sell in their market.

One of my consulting customers has been half India, half not for a decade. There is a real push over the last year to wind down the not India half and shift to mostly India.

India based folks cost 50-75% less. I realize that quality India hires would be closer to US rates, but management is ignoring that aspect.

Ah, the circle of outsourcing.

If they're lucky they'll find one solid worker who's going to watch everyone else's hands. I've had one criminally underpaid unofficial[0] tech lead like that. He was herding a team of 11, where like four people at most really cared about the outcome of this project.

[0] Because otherwise a raise would be in order. Can't have that.

> largest cost center. I disagree because Sales couldn't exist with a product but that's a lost point.

Execs know it well enough. It’s true by definition for all cost center - only reason to have them is to support sales

> I disagree because Sales couldn't exist with a product

There are a lot of counterexamples throughout history.

This is too cryptic. Be clearer what you mean. Ponzi schemes?

Many companies aren't selling anything special or are just selling an "idea".

Like liquid death sells water for a strangely high amount of money - entirely sales / marketing.

International Star Registry gives you a piece of paper and a row in a database that says you own a star.

Many luxury things are just because it's sold by that luxury brand. They are "worth" that amount of money for the status of other people knowing you paid that much for it.

Those are all products.

By this logic you should just be able to list anything for an above average price and have people buy it as a status symbol.

If you can build a luxury brand, sure.

Which is very hard. Contradicting this:

> Many companies aren't selling anything special or are just selling an "idea".

Theranos is one case. Moller and his flying car.

It works. But for most it is not sustainable. It in most cases collapses eventually. But ideas and words and now pictures and videos do sell as in get pre-orders or pre-payments.

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