Regional offices across Asia could see bulk of job cuts as MNCs adopt AI

When Amazon announced 14,000 job cuts across its global offices, including in Singapore, it echoed similar moves by Microsoft and TikTok earlier in 2025 and signalled a broader restructuring driven by rapid advances in artificial intelligence.

Official explanations vary, but the underlying message is clear. The global corporate footprint that once justified large regional teams is being redrawn by technology.

For years, multinational corporations spread routine work across time zones to capture lower labour cost advantages in customer support, data processing and accounting.

But now, automated agents can plan and execute tasks, monitor their progress and course-correct, with only exceptions requiring human review. Generative AI can also be used to carry out much of this work faster and more accurately.

Once these tasks are automated, the rationale for maintaining parallel junior teams across hubs weakens. Governance also becomes simpler when AI models, data pipelines and audit functions sit closer to product and risk teams, typically in the global headquarters in the United States or Europe.

The great restructuring

There is currently no public data breaking down AI-driven job losses between headquarters and regional offices. This absence is not surprising as AI-driven restructuring is still in its early stages, and the effects typically surface only after several workforce cycles. Moreover, MNCs have no regulatory obligation to disclose layoffs by geography, so filings rarely specify where the cuts happen.

Regional hubs such as Procter & Gamble’s Manila services hub and IBM’s Malaysia regional centre also house dense layers of mid-level managers overseeing workflows, tracking progress and consolidating reports. These functions are easily automated by AI agents, making them more structurally exposed.

Such managers are also more structurally exposed compared to their counterparts in headquarters because their roles are tied to process coordination compared to the product and strategy functions that require critical thinking and creativity.

But regional hubs are undoubtedly more vulnerable. MNCs including Amazon, Microsoft and IBM, have historically placed large, shared service centres in Singapore, Manila and Kuala Lumpur. Headquarters, by contrast, tend to house product, strategy and market-facing roles less susceptible to automation.

Still, regional centres are not doomed. In South-east Asia, companies are reshaping functions around work that still require judgement – client engagement, regulatory and localisation expertise, partnerships and physical operations.

DBS Bank offers a glimpse of how this restructuring exercise could pan out. The bank has previously said around 4,000 temporary and contract roles could be affected over three years due to AI adoption. Yet, DBS chief executive officer Tan Su Shan recently underscored the continued need for “warm bodies” in client-facing roles.

Losing the middle layer

One question is whether the challenges faced by regional centres will lead to a hollowing out of middle management. Research firm Gartner predicts that 40 per cent of firms will flatten their structures as self-managed teams become the norm. Amazon and Microsoft have already begun consolidating middle layers as AI automates routine supervisory work.

This thinning creates two risks: juniors lose the mentorship needed to develop into reliable team leads, and firms lose the “translators” who connect goals, workflows and people. Firms risk flattening too far – creating gaps in accountability, training and human judgment.

Yet, middle managers are indispensable at a time of technological change and restructuring. Research consistently underscores their importance in organisational transformation, particularly as firms adopt AI.

McKinsey, a global consultancy, and Harvard Business Review, find middle managers pivotal in redesigning job processes, coaching teams on new tools, and enforcing guardrails for quality, privacy and bias.

That said, if AI and intelligent systems can take over the administrative tasks middle managers used to undertake, companies will have to rethink what routes of progression should look like.

Time-in-seat promotion models should give way to a range of explicit pathways. This could include team lead roles with clear ownership of outcomes, rotations across client work, operations and data assessed by outcomes rather than tenures, and communities of practice where juniors learn from peers and mentors in projects.

A double-edged sword

For trade-reliant Singapore, the advent of AI is a double-edged sword.

Fewer junior roles at multinational regional hubs may thin entry-level pipelines and compress back-office teams.

But, at the same time, displaced mid-career professionals represent a pool of experienced talent that could be absorbed by local companies hungry for talent. SMEs and start-ups may even benefit if they can afford to pay and absorb these professionals.

SMEs may indeed end up the winners in this AI reset. Off-the-shelf AI, accessible cloud tools and bundled services allow smaller firms to achieve outcomes that once required specialist teams, narrowing efficiency gaps with large enterprises.

If smaller firms adopt these tools with clear guardrails and targeted reskilling, they can compete with MNCs on quality and speed, not just price.

There are signs SMEs are adopting AI at a good clip. A recent IMDA report on the Singapore digital economy updates indicated that SMEs are leading in several AI adoption categories, supported by targeted grants and a culture of pragmatic experimentation. A 2024 Nvidia report showed that retail operations and logistics achieved measurable gains in service quality from AI assistants.

Remaining an attractive regional centre

As AI reshapes the role of regional hubs, Singapore’s longstanding strengths – regulatory clarity, rule of law, multilingual talent, and its position as an international business centre – remain essential in areas where human judgment and trust still drive commercial relationships. This is why many MNCs will continue to base their regional sales, risk, compliance, and partnership teams in the city-state.

Singapore’s decade of Smart Nation investments – in the creation of a system of national digital identities that enable cross-border client onboarding, nationwide e-payments that support regional treasury operations, and trusted data-sharing standards that power AI-driven compliance tools – has built the digital infrastructure that allows regional hubs to operate and scale from Singapore.

At the same time, the SkillsFuture movement is strengthening workforce readiness. In 2024, 555,000 undertook SkillsFuture-supported training, with rising participation in Information Technology and AI courses.

Perhaps it’s this combination of investments in digital infrastructure and human capital that gives Singapore an edge that low-cost hubs cannot easily replicate – one that must be assiduously cultivated.

The commentary was first published in The Straits Times.