Absolutely

> It’s all about cost.

Yes and No...

What is happening now in "tech" has happened before in other industries. Since the internet various service industries have outsourced, outshored, nearshored over and over all together and in different order. I would put immigration or even move to the public cloud in that bag of schemes.

Unless those are very low level tasks the companies doing that don't really save money in the short and long term. This has been proven over and over in the last decades, but rarely admitted publicly.

What companies try to hide by doing that are dysfunctions in management and HR (usually the people who won't get offshored).

So yes it is about cost of mismanagement that need to be hidden with a very short term vision, usually to reassure shareholders.

There is another layer to this that is still very taboo. There is an inability for our societies today to make people work together in a reasonably healthy and stable manner. This is why you will often hear about "toxic workplaces" or "great resignation".

And casting those problems in economic terms to avoid talking about it lead us to bad and costly solutions.

Of course your argument leads to two conclusions;

A) given how badly these companies are managed, and how it will be cheaper in the long run to make use of local talent, the market must be ready for a new wave of companies that rise up. Certainly (it would seem) the local workers are available, and ready to work. Certainly there are enough ex-workers who well understand what bad management looks like, and won't make the same mistake.

B) since this outsourcing is expensive, in the long run, I expect incumbents to start failing soon. There's no need to make thus behavior illegal, the market will simply correct naturally to the most efficient path.

The natural approach of the American Entrepreneur is to see where things are going wrong, and step into the gap - forging the next success.

Where you see companies failing, I see opportunity.

I have implemented those cost reduction programs over and over in many industries. I can assure you we always know it is gonna cost more than just doing things right. The problem is there is a lot of bad incentives, people saving their skins and and a whole industry making money out of those cost reduction programs. They are now permanent in many industries and became the standard way to manage those companies.

I would agree with your two conclusions, this is the logical way it "should" go.

Now reality is for most of the big players it probably won't go that way. For example I expect the hyperscalers to go the way telcos went. They have the power (financial, political & co) to freeze their position in the market and they are now a critical part of our infrastructure. But working for them or keeping their stock in the last 20 years was probably a very bad move.