Opendoor exits India as AI reshapes offshore operations

On Wednesday, Opendoor announced its decision to exit India, shutting down its operations in the country less than two years after expanding there. Kaz Nejatian, the CEO of Opendoor, attributed the shift to a strategy of building smaller AI-native teams and bringing operational work back to the U.S. Opendoor, an online home-buying platform, had opened offices in Chennai and Bengaluru in 2024, employing nearly 250 employees in India to manage manual workflows.

The closure occurs alongside broader workforce reductions at the company. Securities filings show Opendoor employed 1,042 people globally at the end of last year, compared with 1,470 a year earlier. Its non-U.S. workforce also declined, dropping to 184 employees at the end of last year compared to 342 employees at the end of 2024. This retrenchment comes as India has grown its outsourcing footprint. The country hosts more than 2,100 Global Capability Centers—which are dedicated offshore units multinationals set up to handle IT, finance, and R&D. These centers employ about 2.36 million people and generate nearly $100 billion in annual revenue. Keshav Lohia, a venture capitalist at Emergent Ventures, described the decision as a watershed moment for the cost-arbitrage model that has made India a hub for back-office operations.

Analysts and investors view the decision as part of a pattern in how companies organize operational work. Phil Fersht, chief executive of HFS Research, stated that the development is not an isolated restructuring. Instead, he explained, “It is part of a much broader pattern we are starting to see as companies redesign operations around AI, automation, and much leaner workflows.” Fersht argued that AI is reducing the amount of operational labor companies require, allowing firms to adopt a services-as-software model—which combines AI, software, and human expertise to deliver outcomes without adding headcount. Other investors share this outlook. Sheel Mohnot, co-founder of Better Tomorrow Ventures, stated that many jobs in India will be lost as AI replaces manual work. Additionally, Varun Rekhi, a venture capitalist at Speedinvest, reported that AI could eventually pressure India’s export industry by reducing demand for labor-intensive services.

Why it matters

The decision serves as a flashpoint in the debate over whether AI is starting to alter the economics of offshore work, challenging the cost-arbitrage model that made India a global hub for back-office operations.