As labor costs in the U.S. continue to rise, many businesses are turning to outsourcing as a strategy to optimize expenses while maintaining operational efficiency. Outsourcing, particularly nearshoring to Latin America, has proven to be a strategic move for companies aiming to stay competitive without compromising quality. This article highlights real-world success stories of businesses that have leveraged outsourcing to reduce costs and improve productivity.
How Outsourcing Helps Companies Cut Costs
Businesses across various industries have successfully utilized outsourcing to address labor cost challenges. Key benefits include:
- Lower salaries compared to U.S. hiring costs
- Reduced expenses on benefits, payroll taxes, and compliance with local labor laws
- Increased flexibility to scale teams as needed
Here are examples of companies that have effectively used outsourcing to achieve significant cost savings.
IBM: Outsourcing for Global Efficiency
IBM has a long history of utilizing outsourcing to reduce costs and improve efficiency. The company offers Business Process Outsourcing (BPO) consulting services, helping clients reimagine operational workflows by integrating automation and AI. This approach has enabled IBM to transform essential processes across enterprises, from human resources to finance, supply chain, and procurement (IBM, 2025). By leveraging global talent and technology, IBM maintains a competitive edge while optimizing operational expenses.
Microsoft: Leveraging Nearshoring for Development
Microsoft has strategically invested in Latin America to enhance its operations and tap into local talent. In September 2024, Microsoft announced a plan to invest 14.7 billion reais ($2.7 billion) over three years to expand its cloud infrastructure and artificial intelligence capabilities in Brazil. This investment aims to support the widespread adoption of AI and bolster Microsoft’s presence in the region (Reuters, 2024).
Additionally, Microsoft has collaborated with local creators in Latin America to produce authentic, region-specific content. By working closely with creators from Argentina, Colombia, Mexico, Peru, Chile, Brazil, and Uruguay, Microsoft generated over 200 images and videos that resonated with Latin American consumers, achieving a 9.8% average engagement rate—2.5 times higher than the benchmark (Social Native, 2025).
U.S. E-Commerce Companies: Reducing Overhead with Nearshoring
Many U.S.-based e-commerce brands have turned to Latin America for customer service outsourcing. According to Auxis, businesses that outsource call center operations to Latin America can achieve up to a 40 percent reduction in costs compared to in-house teams while benefiting from bilingual support and a workforce aligned with U.S. time zones (HireWithNear, 2025).
The Role of Outsourcing in Today’s Business Strategy
Companies across different industries recognize that outsourcing is not just about reducing costs—it also involves improving efficiency, accessing global talent, and increasing flexibility in workforce management.
As labor costs in the U.S. continue to rise, businesses must explore alternatives to maintain profitability. Nearshoring to Latin America offers a balance between affordability and high-quality talent, making it an attractive solution for companies looking to scale sustainably.
Tomorrow’s blog will delve into how nearshoring in Latin America helps businesses stay competitive beyond cost reduction.
References:
HireWithNear. (n.d.). Outsourcing to Latin America: A smart choice for U.S. companies. HireWithNear. Retrieved February 19, 2025, from https://www.hirewithnear.com/blog/outsourcing-to-latin-america
IBM. (n.d.). Business Process Outsourcing (BPO) Consulting. IBM. Retrieved February 19, 2025, from https://www.ibm.com/consulting/bpo
Reuters. (2024, September 26). Microsoft to make $2.7 billion cloud, AI investments in Brazil. Reuters. Retrieved February 19, 2025, from https://www.reuters.com/technology/microsoft-make-27-billion-cloud-ai-investments-brazil-2024-09-26/
Social Native. (n.d.). Microsoft breaks through LATAM market. Social Native. Retrieved February 19, 2025, from https://www.socialnative.com/case-studies/microsoft-breaks-through-latam-market
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