# Nearshore's AI reckoning: fewer heads, new prices, and a race to sell output instead of hours

> Globant, EPAM and Endava are shrinking or stalling as AI cuts how many engineers a project needs. Here's where the staff augmentation business stands, who lost jobs, and what the survivors are betting on.

- URL: https://dev.devisdead.ai/news/nearshore-ai-reckoning
- Published: 2026-10-31T17:37:54Z
- Author: DevIsDead Newsroom
- Section: AI vs Humans
- Tags: nearshore, staff augmentation, globant, epam, endava
- Originally reported by Globant (SEC filing) (https://www.sec.gov/Archives/edgar/data/0001557860/000110465926095916/tm2623064d1_ex99-1.htm); Bloomberg Línea (https://www.bloomberglinea.com/latinoamerica/argentina/globant-recorta-prevision-de-facturacion-en-2026-y-se-desploman-sus-acciones-en-wall-street/); The Motley Fool (https://www.fool.com/earnings/call-transcripts/2026/02/27/globant-glob-q4-2025-earnings-call-transcript/); La Nación (https://www.lanacion.com.ar/economia/IA/globant-despidio-a-1000-empleados-a-nivel-global-nid24062025/); EPAM (SEC filing) (https://www.sec.gov/Archives/edgar/data/0001352010/000135201026000043/exhibit99_q2x2026.htm); MarketBeat (https://www.marketbeat.com/instant-alerts/epam-systems-q1-earnings-call-highlights-2026-05-10/); Endava (investor release) (https://investors.endava.com/sec-filings/content/0001656081-26-000015/endavapressreleaseq3fy26.htm); Investing.com (https://www.investing.com/news/earnings/endava-tumbles-21-as-revenue-misses-analyst-estimates-guidance-disappoints-4703812); Endava (SEC filing) (https://www.sec.gov/Archives/edgar/data/0001656081/000119312526435193/d400729dex991.htm); Business Today (https://www.businesstoday.in/amp/latest/corporate/story/coforge-to-acquire-ai-firm-encora-in-235-billion-deal-to-boost-us-ai-led-services-play-508301-2025-12-26); Expansión (https://expansion.mx/tecnologia/2026/02/17/hay-30-000-despidos-en-tecnologicas-por-ia).

For two decades the nearshore pitch was simple: talented engineers in Buenos Aires, Montevideo, Medellín or Guadalajara, in your time zone, billed by the hour. AI is now attacking the one variable that business model depends on, which is how many people a project needs.

We went through this year's earnings releases, SEC filings and reporting from Bloomberg Línea, La Nación and others to see how the biggest staff augmentation and nearshore firms are holding up. Every figure below links back to its source in the credits at the end of this article.

## The state of the big three

**Globant** is the bellwether for Latin American software services, and its numbers have gone flat. Second-quarter 2026 revenue was $614.4 million, essentially the same as a year earlier, according to the company's [SEC filing](https://www.sec.gov/Archives/edgar/data/0001557860/000110465926095916/tm2623064d1_ex99-1.htm). It lowered its full-year forecast to between $2.428 billion and $2.462 billion, which at the low end means a small decline. [Bloomberg Línea](https://www.bloomberglinea.com/latinoamerica/argentina/globant-recorta-prevision-de-facturacion-en-2026-y-se-desploman-sus-acciones-en-wall-street/)'s Francisco Aldaya reported that the new range came in under analyst expectations and the stock dropped more than 10% after hours, leaving it down about 37% for the year at that point.

**EPAM** is still growing, but slowly. Second-quarter revenue rose 4.5% to $1.415 billion, per its [earnings release](https://www.sec.gov/Archives/edgar/data/0001352010/000135201026000043/exhibit99_q2x2026.htm). The company has lowered its 2026 outlook and now expects growth of 3.2% to 4.2%, or 2% to 3% once currency effects and acquisitions are stripped out. Its third-quarter results arrive on November 5.

**Endava** is having the roughest year. Revenue for the quarter ending March fell 8.4% to £178.5 million, and its CEO called it one of the hardest periods in the company's recent history. [Investing.com](https://www.investing.com/news/earnings/endava-tumbles-21-as-revenue-misses-analyst-estimates-guidance-disappoints-4703812) reported a 21% share drop that day, plus a £364.6 million goodwill write-down. Then, on October 28, Endava [disclosed](https://www.sec.gov/Archives/edgar/data/0001656081/000119312526435193/d400729dex991.htm) that it will restate its fiscal 2026 results after an accounting investigation, withdrew its guidance, and announced that its CFO had resigned. That part of the story is about governance, not AI, but it lands on a company already struggling with demand.

## How AI is hitting the model

The pressure is not that clients stopped buying software. It is that they want to stop paying for hours.

On Globant's fourth-quarter call, as the [Motley Fool transcript](https://www.fool.com/earnings/call-transcripts/2026/02/27/globant-glob-q4-2025-earnings-call-transcript/) shows, CEO Martín Migoya described clients asking to move from hour- or seat-based contracts to paying for output. His CFO, Juan Urthiague, was blunt that the company's AI subscription model needs fewer people by design. Migoya's own take on the risk that AI eats Globant's traditional revenue: "I am not in a position to prevent cannibalization." By August he told Bloomberg Línea that Globant is deliberately speeding up those migrations even though it costs revenue in the short term.

EPAM described the same shift. On its first-quarter call, summarized by [MarketBeat](https://www.marketbeat.com/instant-alerts/epam-systems-q1-earnings-call-highlights-2026-05-10/), management said its big pipeline deals now use commercial models built around AI and token consumption instead of classic time-and-materials billing. Endava, meanwhile, blamed uneven demand and sales cycles that keep getting longer.

For a business that has always grown by adding heads, the math is uncomfortable: if a project needs fewer engineers, revenue falls unless the price per unit of work rises.

## How many jobs

There is no reliable count of AI-related job losses across the Latin American nearshore industry. What the companies disclose looks like this:

- **Globant** cut about 1,000 people in June 2025, roughly 3% of its workforce, and closed offices in Ushuaia and Resistencia, as [La Nación](https://www.lanacion.com.ar/economia/IA/globant-despidio-a-1000-empleados-a-nivel-global-nid24062025/) reported at the time, tying it to a restructuring and a pivot to AI services. Its headcount has kept falling since: 30,084 people in June 2025, 28,510 in March 2026 and 27,411 in June 2026. That is 2,673 fewer people in a year, a drop of 8.9%. Globant booked $32.3 million in second-quarter costs it says mainly cover workforce resizing and office reductions.
- **EPAM** says it reduced headcount in Mexico and made targeted cuts in other countries as part of cost savings, without giving a number. Its total staff has held at about 62,850.
- **Endava** reported 11,225 employees in March 2026, 140 fewer than a year earlier.

The wider tech industry gives context. [Expansión](https://expansion.mx/tecnologia/2026/02/17/hay-30-000-despidos-en-tecnologicas-por-ia), citing the RationalFX tracker, counted more than 30,000 tech job cuts worldwide in just the first six weeks of 2026, about 80% of them in the US, and described the impact on Mexico as early but coming.

One caveat: companies rarely say a specific layoff was caused by AI. Slowing demand, cost programs and AI-driven productivity are tangled together, so treat these as jobs lost during the AI transition rather than jobs replaced by a model.

## What the survivors are betting on

**Selling output, not hours.** Globant's AI Pods are subscriptions with a set amount of AI capacity. They ended 2025 at an annualized run rate of $20.6 million with gross margins of 45% to 60%, well above the company's 38% average, and Globant is aiming for $60 million to $100 million by the end of 2026. Its Glob.AI platform reached $52.8 million in annualized revenue in the second quarter, up 61% in three months. The catch: AI Pods are still only about 2% of revenue.

**Retraining the bench.** EPAM says its pure AI revenue topped $125 million in the first quarter, against a target of $600 million for the year. It is building an Anthropic practice, says more than 20,000 employees have completed Anthropic's training, and wants 10,000 certified architects by year-end.

**Growing the AI slice.** Endava says AI-driven work went from 5% of its revenue to 15% in a year.

**Buying scale.** India's Coforge agreed to buy Encora in a deal valued at $2.35 billion, pitched as an AI-led services play, according to [Business Today](https://www.businesstoday.in/amp/latest/corporate/story/coforge-to-acquire-ai-firm-encora-in-235-billion-deal-to-boost-us-ai-led-services-play-508301-2025-12-26). Part of the appeal: Encora's more than 3,100 professionals across Latin America.

## What it means if you work in nearshore

The time zone advantage hasn't gone anywhere, and neither has the need for people who can turn vague requirements into working systems. What is fading is the pyramid model, where a few senior engineers lead a large base of juniors billed by the hour. Firms are rebuilding around smaller, senior teams that use AI heavily and get paid for results.

That favors engineers who can own a product end to end, work fluently with agents, and talk to clients about outcomes instead of tickets. It is harder on entry-level roles, which were the pyramid's base. For the companies, the open question is whether output pricing can grow fast enough to replace the hours they are giving up. So far, the AI lines are growing quickly but remain a small share of revenue.

**[Scoreboard](/scoreboard) update:** AI +1. Nearshore firms trade headcount for AI pods.

Stay undead.