The Future of BPO in the Age of AI and Automation: A Conversational Recap

The BPO industry is standing at a crossroads, and that was the central theme of our recent webinar, The Future of BPO in the Age of AI and Automation. Traditional outsourcing models are giving way to intelligent process automation and digital-first customer experiences, making it an ideal moment to discuss the challenges facing the industry, focusing first on the Philippines. Twilio’s Sam Richardson spoke to Hungry Workhorse CEO Reynaldo ‘Rey’ Lugtu in a candid conversation about where the industry is headed in the near future.

We kicked things off by acknowledging the elephant in the room: AI is changing everything. “There’s pressure for BPO companies, especially in the number of people in employment,” Lugtu noted. “AI is advancing faster, and AI adoption globally is accelerating.” But while the global impact is already being felt, the shift in the Philippines—one of the world’s BPO powerhouses—has been more gradual. Lugtu observed that adoption of AI technologies “is still at snail’s pace and employment is not being impacted, but in the medium term, there’s going to be huge pressure for local BPO companies to adopt AI and advanced tools.”

One of the most interesting threads was the evolving nature of work. The panelists discussed how the workforce is being reshaped, with a growing need for upskilling in AI, analytics, and even prompt engineering. The Philippine government, for example, is aiming to upskill 500,000 employees by 2028. “There’s a lack of advanced skills,” Lugtu explained, “so organizations and the government are already rolling out roadshows to address this.”

But what about the human side? The speakers were candid about the tension between protecting jobs and embracing automation. “About 2 million employees depend on the local BPO sector,” Lugtu said. “Organizations are taking it slowly because fast adoption of AI will definitely shift employment and impact the workforce.” Yet, the data is nuanced: a recent study found that while 8% of BPOs expect to decrease headcount due to AI, 13% actually anticipate an increase, and many see a shift toward new roles like AI trainers and prompt engineers.

The conversation also touched on the rise of boutique and specialized BPOs. “The traditional, human contact center will eventually disappear,” Richardson predicted, “and we’ll see more specialized offerings—smaller BPOs serving niche industries like healthcare, telco, and cybersecurity, and even specializing in certain demographics.” This shift is already happening, with some companies reducing headcount dramatically and focusing on high-value, technical services. “We’re seeing BPOs that used to have thousands of employees now operating with just a handful of highly skilled team leaders,” Lugtu shared.

Personalization emerged as a key differentiator. “Hyper-personalization technology is already here,” Richardson said. “With the aid of AI tools and platforms, companies can segment and serve highly specialized markets.” But the human touch remains vital, especially for complex or sensitive customer needs. “We are a culture which is warm and hospitable. We are polite and naturally helpful with clients,” Lugtu reminded us, highlighting the enduring value of empathy and cultural strengths.

The panel also explored how KPIs are evolving. “Traditional BPOs are measured in time—average handle time, resolution time,” Richardson explained. “But with AI, metrics will transform to outcomes-based measures, like chatbot resolution rates, sentiment analysis, and AI containment rates.” This shift is forcing BPOs to become true partners in digital transformation, not just cost centers.

As the session wrapped up, the speakers offered some calls to action. In the short term, accelerate employee training in AI and analytics. In the medium to long term, reform education to emphasize critical thinking, leadership, and hybrid management of people and AI. “Entry-level jobs will be done by AI,” Lugtu predicted, “so we need to prepare for a future where human roles focus on higher-order skills.”

In the end, the message was clear: AI and automation are not threats—they’re catalysts for reinvention. The winners will be those who embrace change, invest in people, and deliver differentiated, hyper-personalized experiences. As Richarson put it, “The role of the human certainly isn’t leaving us just yet.”

Interested in watching the session? Watch on demand, and keep and eye out for more BPO-focused webinars coming up in the near future.