The Day When Your Monthly Outsourcing Partner Might Disappear

How much does your company pay in outsourcing costs each month?

300,000 yen for web production, 150,000 yen for accounting services, and 100,000 yen for translation. For small and medium-sized enterprises in rural areas, outsourcing costs represent a significant portion of fixed expenses. And now, those outsourcing partners are on the verge of disappearing.

This is not a threat; it’s a structural issue.

From late 2024 to 2025, mass layoffs due to AI implementation are accelerating overseas. Dropbox has reduced its workforce by 16%, UPS has cut 12,000 jobs, and Duolingo has terminated most of its translation contractors. The reason is the same—”AI was sufficient.”

Is this just a story about GAFAM? Does it not concern us?

No, it’s the small and medium enterprises that will be hit hardest. This is because large companies are cutting out the “intermediate jobs,” and those intermediate jobs were handled by your outsourcing partners.

The Mechanism of “Outsourcing Partners Disappearing”

Let’s break it down step by step.

1. Large companies internalize using AI → Orders to outsourcing partners decrease
2. Sales of outsourcing partners decline → They reduce staff and lower prices
3. Talented individuals leave outsourcing partners → Quality decreases
4. Small and medium enterprises continue to depend on lower-quality outsourcing partners → This is where the danger lies

In other words, there is a phase where outsourcing partners “deteriorate” before they “go bankrupt.” This is the worst-case scenario. The price remains unchanged, but the quality of deliverables gradually declines. By the time you notice, there are no alternatives available.

What rural small and medium enterprises face is this “quiet disappearance.”

Calculation 1: Determine the “AI Replacement Rate” of Outsourcing Costs

First, I want you to write down all the details of your current outsourcing costs.

For example, if you are paying 300,000 yen for web production, the breakdown might look like this:

Out of the total of 300,000 yen, the portion that can potentially be replaced by AI is approximately 210,000 to 240,000 yen. This means that your monthly cost of 300,000 yen could potentially drop to 60,000 to 90,000 yen. This translates to an annual savings of 2.52 million to 2.88 million yen.

This isn’t just a “50% reduction”; a 70-80% reduction is within realistic reach.

What is happening specifically?

• Banner Production: There are cases where a banner that was ordered from a designer for 5,000 yen each can now be created in-house in 10 minutes for virtually zero cost using Canva AI and Midjourney.
• LP Production: With AI coding tools like Cursor and Bolt.new, LP production that used to cost 500,000 yen is now being completed by in-house staff in three days.
• SEO Articles: By using Claude or ChatGPT to draft articles and having humans edit them, the cost per article has dropped to one-fifth of outsourcing.

This is not something that “might happen in the future”; it is already happening as of 2025.

Calculation 2: Honestly Calculate the “Internalization Costs”

At this point, jumping to the conclusion that “we should internalize everything using AI” is risky. Internalization incurs costs, and these need to be calculated honestly.

Necessary Investments

Initial investment: 300,000 to 700,000 yen. Monthly running cost: 40,000 to 80,000 yen.

In contrast, if you continue outsourcing, the annual cost will be 3.6 million yen (300,000 yen x 12 months).

The annual cost if you internalize: initial investment of 500,000 yen + running cost of 720,000 yen (60,000 yen x 12) = about 1.22 million yen.

Difference: 2.38 million yen annually.

Looking at this number, will you think “we should do this too” or “it’s too much trouble, let’s stick with the current way”? This is the crossroads.

However, there is a caveat. The most expensive cost of internalization is not the “cost of failure” but the “cost of doing nothing.” If you wait until your outsourcing partner deteriorates to rush into internalization, your operations will come to a halt during the learning period. If you are going to act, you should start in parallel while your outsourcing partner is still functioning well.

Calculation 3: The Price of “Work Left for Humans” Will Rise

The third calculation is the most important.

As the costs of jobs that can be replaced by AI plummet, the value of jobs that cannot be replaced by AI will rise.

This is the principle of supply and demand.

• The unit price of designers who can create template-based banners → plummets
• The unit price of directors who can articulate the vague ideas in the minds of business owners and translate them into a brand’s worldview → skyrockets
• The unit price of engineers who can perform routine coding → plummets
• The unit price of individuals who understand business flows and can combine AI tools to systematize processes → skyrockets

What small and medium enterprises should do is to “leave the jobs that are becoming cheaper to AI and invest the savings into the jobs that are becoming more valuable.”

To be specific:

Out of the previous monthly outsourcing cost of 300,000 yen, internalize 240,000 yen worth of work using AI. Use 100,000 yen of the savings for monthly brainstorming sessions with truly talented directors or consultants. The remaining 140,000 yen can be kept as profit.

This way, costs decrease, the strategic quality of deliverables increases, and profits rise. It’s a win-win situation.

The Structure That Small and Medium Enterprises Can Win Because They Are Small

Now, let’s get to the main point.

Large companies require approval for AI implementation. It takes three months for security reviews, six months for proof of concept (PoC), and one year for full company deployment. In total, it takes two years.

What about small and medium enterprises? If the president says, “Let’s do it,” they can start as early as tomorrow.

This speed difference in decision-making is the greatest weapon for small and medium enterprises in the AI era.

While large companies are spending two years considering AI implementation, small and medium enterprises can actually run their operations using AI, accumulate know-how, and fundamentally change their cost structures.

Moreover, rural small and medium enterprises have the advantage of being “close to the field.” If AI tools are difficult to use in the field, they can be corrected the same day. In large companies, it takes multiple layers for feedback from the field to reach management. Small and medium enterprises do not have those layers.

So, What Should We Do?

I want you to do just three things.

① Create a complete list of outsourcing costs by the end of this month
Write down what you are paying for, how much, and to whom. List everything. This can be done in 30 minutes.

② Write down the “AI replacement potential” on that list
Three levels: high, medium, low. If in doubt, mark it as “high.” Considering the speed of AI evolution by 2025, anything marked as “medium” now will likely be “high” in six months.

③ Choose one task with a “high” replacement potential and start experimenting next week
You don’t need to do everything at once. Just one task is enough. Whether it’s banner production, meeting minutes creation, or email responses, try one. Once you get the hang of it, the second and third tasks will come naturally.

It’s too late to act after your outsourcing partners disappear. Start building a system that can operate without outsourcing partners while they are still functioning well. This is the greatest risk hedge.

AI is not the enemy of small and medium enterprises. It is the most powerful tool for breaking free from outsourcing dependency and controlling your business with your own hands.

Will you use it or be used by it? The answer is already clear.