From cheap customer service to billion-dollar vulnerabilities: the duality of India's outsourcing factories

Author: Cookie

Original Title: India, the Outsourcing Factory of the Crypto World

On December 27, 2025, Coinbase CEO Brian Armstrong tweeted announcing that Hyderabad police in India had arrested a former Coinbase customer service employee, and are still pursuing more suspects.

This is related to a data breach case with estimated losses of up to $400 million. According to Reuters, on June 2 of last year, six insiders revealed that Coinbase had known as early as January last year that its customer support outsourcing partner TaskUs experienced a user data leak. An employee at the company’s support center in Indore, India, was found taking photos of work computers with their personal phone, and was suspected of selling Coinbase user data to a hacker along with an accomplice. The hacker used this information to impersonate Coinbase employees, scam victims out of cryptocurrency, and demanded $20 million in ransom for user data from Coinbase.

However, despite making progress in pursuing the suspects after such a serious security incident, Coinbase has not publicly announced whether they will switch to hiring employees from other countries or regions, or keep domestic US staff. This move has sparked many dissatisfied voices on X, criticizing that outsourcing from India is unreliable and accusing Coinbase of lacking a serious attitude towards user data security.

Although TaskUs is not an Indian company, the problem indeed occurred at TaskUs’s Indian branch. And it’s not only Coinbase that has suffered losses due to malicious actions by outsourced Indian employees.

One of the most famous insider cases in e-commerce is Amazon outsourcing “seller support” and “fraud review” services to third-party providers in Hyderabad and Bangalore. Some Indian outsourced employees are contacted and bribed by third-party sellers via Telegram and other channels. They delete negative reviews, restore suspended accounts, or leak internal sales data of competitors, earning hundreds to thousands of dollars in cash rewards. These outsourced employees earn only about $300–$500 per month.

Microsoft also outsourced its basic technical support services to third-party providers in India. Similar to the case above, outsourced employees, dissatisfied with their meager wages, sold information to scam groups, and even actively guided customers during work hours to click on phishing sites or buy fake services.

These models, where customer service, support, and review tasks are delegated to external service providers, are called “BPO (Business Process Outsourcing).” To reduce costs, improve efficiency, and focus on core business, these highly repetitive and non-creative processes are handed over to third parties.

Despite numerous issues, India remains the king of the global outsourcing industry. According to a report by Astute Analytica, in 2024, the Indian BPO market was worth about $50 billion, and is expected to reach $139.35 billion by 2033. Business processes handled via voice solutions are managed by Indians for 35% of the industry, while non-voice processes (email, online chat, etc.) are managed by Indians for 45%.

The massive scale, combined with structural problems leading to chaos. The ability to solve problems but also create new ones. What is the real situation behind Indian outsourcing?

Cheap and irresistible

Everyone agrees that one of the biggest advantages of Indian outsourcing is “cheap.” This is also the reason behind Coinbase’s $400 million data breach.

When TaskUs finally discovered the leak, the mastermind Ashita Mishra’s phone contained data on over 10,000 Coinbase users. The employee and accomplices could earn $200 for each photo of user account data they took. Sometimes Mishra would take up to 200 photos a day.

According to 6figr.com, the annual salary for customer support positions at TaskUs is 330,000–400,000 rupees, roughly $3,700–$4,440 USD. Converted to daily wages, that’s no more than $15 per day.

In other words, Mishra’s daily “photo-taking” income could be over 2,600 times the daily wage, which explains why hackers bribed outsourced TaskUs employees and how they succeeded in bribery.

In comparison, Coinbase’s expected salary for the “Customer Support Agent” position listed on web3.career is $69,000–$77,000.

There is such a huge salary gap between “formal employment” and “outsourcing,” yet there was no stricter control over data access permissions for outsourced employees, which is the reason for Coinbase’s data security incident.

As long as outsourcing saves more on labor costs than the compensation for accidents, these companies will continue. We can’t say they are shortsighted or sacrificing long-term interests. After the incident, these companies took measures to prevent similar accidents from happening again. For example, Coinbase, which previously hired Indian customer support directly, switched to outsourcing after the incident. Currently, Amazon’s seller support center enforces extreme physical controls: employees must hand over their phones and smartwatches before entering, and paper and pens are strictly prohibited at desks.

“Cheap” is certainly a huge advantage, but if we shift the perspective to these ordinary outsourced employees doing the actual work, “cheap” essentially stems from outsourcing being a labor arbitrage industry. Moving work or production to lower-cost locations to profit from the difference is inherently layered with “subcontracting.” A single outsourcing contract from a large enterprise can be subcontracted 2–4 times, each layer deducting commissions, management fees, and profit.

Although there are no public data revealing how much Coinbase pays TaskUs, making TaskUs’s Indian employees earn less than $15 a day, a report by Astute Analytica last year on the outsourcing market shows that in top Indian cities, the monthly salary for frontline positions is about 15,000–20,000 rupees (roughly $165–$220), and in second-tier cities, it’s even lower, around 8,000–12,000 rupees ($88–$132). What about the billing standards for service providers? Voice processes are billed at $12–$15 per hour, non-voice processes at $18–$22 per hour.

That’s roughly equivalent to working tirelessly for a month, 24 hours a day, and only earning what a day’s wage would be for the outsourced company. Because the work is extremely demanding, staff turnover is very high—up to 30%, even after optimization from 50%.

You might think, just making calls as a customer service rep, why expect a high salary? In fact, global outsourcing in India for customer support is a different level of challenge. In 2024, the US contributed 55–60% of the revenue for India’s outsourcing industry. Considering the roughly 12-hour time difference, workers can sit in front of phones or screens and work nonstop, living in a perpetual night. For Indian customer support, communicating with Western users requires not only proficiency in business knowledge but also minimizing accent for better understanding, familiarizing oneself with regional dialects, idioms, and cultural nuances for more efficient communication.

“Cheap” is indeed irresistible, but it’s also built on the hard sweat of low-level Indian workers.

The counterattack of “cheap labor,” the road of Indian outsourcing

In the early 1990s, India’s per capita income was less than one-tenth of the US. Moreover, India had a large pool of highly educated, English-speaking labor. This made American managers realize that instead of hiring expensive programmers domestically, outsourcing tasks to India was more feasible, with almost no barriers in documentation and conference calls.

Not only was there no “language barrier” in communication, but India also had a roughly 12-hour time difference with the US. When US companies finished work and handed over tasks to India, Indian employees started working; by the next US morning, the tasks were completed. This “follow-the-sun” development model greatly shortened project cycles.

Doesn’t that sound like the “offline auto-upgrade” feature in idle mobile games? This is also called the “time zone dividend.”

And as the saying goes, “timing, geography, and harmony”—at the turn of the 21st century, the Y2K crisis became the “timing” advantage for India’s IT industry. Faced with complex and tedious data storage issues caused by the Y2K bug, European and American companies, suffering from IT talent shortages and high labor costs, turned to Indian firms with cost and language advantages for data processing. Indian companies, in turn, gained experience and clients during the Y2K solutions, gaining fame and entering the fast lane.

To shed the “cheap labor” label, Indians also thought of a universal solution—certification. By the late 1990s, nearly 75% of companies with CMM Level 5 (highest software process maturity) certification worldwide were Indian. Holding such certificates meant establishing a professional and standardized image, which Indians realized over 30 years ago.

As this developed, the Indian government also saw a lucrative industry. The IT sector didn’t require physical infrastructure like roads; just internet and talent could start a snowball effect. Early on, India established numerous Software Technology Parks (STPI), providing satellite links (to address infrastructure issues like power outages and poor connectivity) and tax incentives. Top Indian universities also continuously cultivated industry-relevant talent.

Thus, India gradually formulated a complete formula for conquering the global outsourcing market—cheap English-speaking talent + seizing historical opportunities (Y2K) + certification to establish professionalism + government support + ongoing talent development. With this formula, they succeeded.

But now, this formula is beginning to show signs of divergence.

High-end “offshore outsourcing,” low-end “struggling”

Indians are of course unwilling to only do repetitive low-end outsourcing work; they are still developing. In recent years, more and more well-known companies have established GCCs (Global Capability Centers) in India. Currently, India has over 1,900 GCCs, with about 35% of Fortune 500 companies owning such wholly owned R&D bases in India.

These include giants across various industries, such as JPMorgan Chase, Goldman Sachs, HSBC, Wells Fargo in finance; Microsoft, Amazon, Google in tech; Walmart, Target in retail.

These GCCs no longer handle customer support or basic code maintenance but are directly subordinate to the parent company, responsible for global, core business activities. Indian GCCs now contribute over 50% of revenue in some cases, and about 45% of them manage end-to-end global product lifecycles, from concept design to final release, all in India. That is, Indians are not only cheap but also capable.

GCCs are like these global top companies leaving their home countries to set up “offshore outsourcing” in India.

It’s hard to imagine that even Japanese companies, in the past year, have begun to significantly move operations abroad, establishing GCCs in India. Honda and Hitachi expanded their R&D in India in 2025. Their reason: Japan’s digital transformation is too slow, talent gaps are widening, and in India, they can access cutting-edge AI and Software-Defined Vehicle (SDV) technologies at one-third the cost of Japan.

In India, if you want to recruit 500 engineers skilled in specific cloud technologies within a month, Bangalore or Hyderabad’s job markets can respond quickly. India currently has about 20% of the world’s digital skills talent. In fields like generative AI, cybersecurity, and cloud architecture, its talent pool is unmatched by regions like Eastern Europe or Latin America.

And local Indian university graduates also love to join these GCCs—they don’t have to leave home, and they enjoy the same benefits and career paths as employees of these global corporations. The flywheel is spinning again.

As for repetitive, non-creative outsourcing jobs like customer support and reviews, although some countries like Vietnam and the Philippines are emerging as competitors with “cheaper” options, the most threatening rival to India is the rapidly evolving AI technology.

Conclusion

So, Coinbase’s attitude is not surprising; it’s a pragmatic business decision. But the incident also exposed major internal management flaws.

Are there vulnerabilities? No problem. Coinbase will tighten controls, patch the gaps, and continue to operate as usual.

The reason why Indian outsourcing can “dominate the world” is also very clear—places cheaper than it, have fewer skilled workers than it, and places with better English than it, are not as cheap as it. The advantages that make big companies happy and able to negotiate easily are also the exhaustion and heartache of the employees behind them.