The ”Keep Call Centers in America Act": Economic Stakes for Global Service Leaders
- Brew Baritugo
- Aug 24
- 3 min read
The U.S. “Keep Call Centers in America Act of 2025” is framed as a job-protection measure. On paper, it’s about disclosure and penalties. In practice, it forces companies to rethink decades of outsourcing strategy and puts pressure on economies that depend on service exports.
To understand the scale, consider this: the Philippine BPO sector employs around 1.7 million people and generates close to US$35 billion a year, nearly 9 percent of national GDP. India’s IT-BPM sector is even larger, with over 5 million employees and US$250 billion in annual export revenue. Roughly 60 percent of Fortune 500 companies now have service centers in Asia. The reason is straightforward - labor arbitrage. A U.S. customer service agent costs between US$40,000 and US$50,000 per year once wages and benefits are factored in. An equivalent seat in the Philippines costs US$12,000 to US$15,000. The savings per agent land in the range of 65 to 70 percent. Multiply that across a 5,000-seat operation, and the difference is US$150 to US$175 million every year. That is what is now in play.
The bill creates two immediate disruptions. First, companies that offshore more than 30 percent of their call center operations would be placed on a Department of Labor list, making them ineligible for new federal contracts, grants, or loans. For firms in financial services, healthcare, and defense contracting, federal business can represent 10 to 25 percent of revenue. Second, penalties on existing awards are severe. The proposed fines reach up to 8.3 percent of a contract’s value per month. On a US$500 million award, that translates to US$41.5 million in monthly penalties -enough to erase the very savings that offshoring was designed to deliver.
Transparency rules add another layer. Customers would be told explicitly if their call is routed offshore or handled by AI, and they would have the right to request a U.S.-based agent. While harder to quantify, the reputational cost matters. Consumer surveys suggest that 30 to 40 percent of Americans prefer domestic support when given the choice.
The global effects split in three directions. In the U.S., domestic providers stand to benefit from federal procurement shifts, but they will struggle with supply. Call center turnover rates in the U.S. already sit at 30 to 40 percent, and wage floors are rising. The cost of service will climb. In offshore hubs like the Philippines and India, the commercial market - retail, telecom, technology - remains less exposed, but even a partial reshoring of U.S. seats could be damaging.
If only 10 percent of U.S. offshore demand is repatriated, the Philippines risks losing 150,000 to 200,000 jobs, cutting US$2 to US$3 billion in annual wages and local spending power.
The third effect is technological. Rather than paying higher domestic wages, companies will accelerate adoption of automation. Gartner projects that 25 percent of customer interactions will be AI-driven by 2026, up from about 15 percent today. Legislation like this could push that number higher, as firms use AI to close the labor gap while managing costs.
For C-suites, the implications are clear. The old model of shifting as much volume offshore as possible is no longer viable if federal exposure is material. The economics of offshoring remain strong, but the political and compliance costs are climbing. The conversation now is not about whether to keep or abandon offshore delivery. It is about designing a model that balances domestic capability, nearshore agility, offshore scale, and AI acceleration - all within a framework that can absorb political shocks and changing customer expectations.
The larger message of this Act is that the era of frictionless offshoring is ending. The leaders who treat it as a compliance issue will find themselves reacting. The ones who treat it as a structural shift will be the ones shaping the next decade of global services.
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