Let me say something that’s going to make a lot of founders in the region uncomfortable. Your business model is broken.

Not because your product is bad. Not because your market is wrong. But because the single biggest competitive advantage Southeast Asian companies have leaned on for the last three decades — cheap, abundant, human labour — is about to get vaporised. And most of you are still acting like it’s 2015.

The low-cost labour playbook (and why it worked)

SEA companies built empires on a simple arbitrage. A customer support team that costs US$800,000 a year in San Francisco? You could spin up the same headcount in Manila or Kuala Lumpur for a fraction of that. Data entry teams. Finance operations. Back-office processing. Marketing content farms. The whole machine ran on one fuel: human time, sold cheaply.

It worked spectacularly. The Philippine BPO industry alone generated US$38 billion in revenue in 2024, employing 1.82 million full-time workers. And that’s just one country. The sector contributes 7.5 per cent of the Philippines’ GDP, with projections targeting US$59 billion by 2028. Grab, Sea Limited, and Gojek, the regional giants, scaled their operations on the back of massive human workforces doing tasks that Western companies couldn’t afford to staff domestically.

The entire regional tech ecosystem was quietly subsidised by the labour cost delta.

Here’s the thing nobody talks about enough. Most SEA startups weren’t really tech companies. They were logistics companies with an app. They were customer service operations with a website. The “tech” was the front door. The humans were the entire building. That building is now on fire.

Also Read: Managing talent in an economic downturn

What SEA companies need to do

Stop treating AI as a productivity tool and start treating it as a structural redesign of your business.

The companies that win in the next five years aren’t the ones with the biggest teams. They’re the ones with the best systems, the sharpest operators, and the courage to rebuild before the market forces them to.

The cheap labour era was a gift. It funded decades of growth.

That gift is expiring.

The question is whether you’re building the next model — or still riding the last one.

People think AI is a future problem. It’s not. It’s a right now problem that most operators are choosing to ignore because it’s uncomfortable.

Here’s what’s happening in the general tech landscape that should terrify any SEA founder still relying on headcount as a growth lever:

• Customer Support is being gutted. Not trimmed, gutted. Klarna publicly stated that its AI assistant handled the equivalent work of 700 full-time customer service agents, cutting resolution times from 11 minutes to under 2 minutes. The AI handled two-thirds of all customer service chats in its first month of launch. (Note: Klarna later reversed course and began rehiring human agents after customer satisfaction declined. A reminder that the transition is real, but messy. The displacement happened. The question is the pace, not the direction.)
• Content and Creative is being commoditised. Job postings for writers dropped 28 per cent in 2025 — a two-year decline accelerating year over year. Over 81 per cent of digital marketers already fear AI will replace content writers, and that fear is turning into a lived reality. The content farm model, hundreds of writers pumping out SEO articles, is structurally broken. AI writes faster, cheaper, and at an acceptable quality for the vast majority of use cases.
• Data Operations and Finance Processing is being automated at a pace that is genuinely shocking. Data entry clerks face 90 per cent+ automation potential; bookkeepers face 85 per cent. Invoice processing. Reconciliation. Document extraction. These were full departments. They’re now becoming single-person-oversees-a-tool functions.
• Software QA and Entry-Level Coding is contracting. Entry-level hiring at the 15 biggest tech firms fell 25 per cent from 2023 to 2024. Overall, programmer employment in the US fell 27.5 per cent between 2023 and 2025. Salesforce announced it would stop hiring new software engineers in 2025, citing AI-driven productivity gains. Junior developers who spend their days writing boilerplate, fixing repetitive bugs, or building basic features are finding that AI does their job in a fraction of the time.

This isn’t speculation. In the first six months of 2025 alone, nearly 78,000 tech job losses were directly attributed to AI, roughly 427 layoffs per day.

Also Read: Singapore aims to lead in AI — but where’s the talent?

The roles that survive

Let’s be precise here because blanket panic helps no one.

• Operators who manage AI systems aren’t going anywhere. They’re becoming more valuable. Someone has to prompt, audit, maintain, and redirect these tools. That skill set is being built right now, and it’s worth investing in.
• High-context relationship roles are safe. Enterprise sales. Strategic partnerships. Government relations. Key account management. AI doesn’t build trust over dinner. Humans do. If your role requires reading a room, navigating politics, or making someone feel genuinely understood, you’re still essential.
• Physical and on-ground execution can’t be offshored to a data centre. Field technicians. Last-mile delivery supervisors. Healthcare workers. Tradespeople. Mental health counsellors score 97/100 on AI resistance; surgeons 96/100; electricians 94/100. The jobs that require a body in a specific place are structurally protected (for now).
• Creative direction and taste-making remain human. Job postings for creative directors, creative managers, and creative producers are holding steady, while execution roles collapse. AI can execute. It cannot set a direction. The person who knows what to make and why it matters still has a seat at the table. The 20 people executing that vision do not.

Looking forward

Stop treating AI as a productivity tool and start treating it as a structural redesign of your business.

The companies that win in the next five years aren’t the ones with the biggest teams. They’re the ones with the best systems, the sharpest operators, and the courage to rebuild before the market forces them to.

The cheap labour era was a gift. It funded decades of growth. That gift is expiring. The question is whether you’re building the next model or still riding the last one.

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