America's Back Office Is Disappearing --- Phoenix built an empire of cubicle jobs. AI is coming to tear it down.

“PHOENIX -- All around this desert city's sprawling metro area, low-rise office parks with tinted windows and vast parking lots stretch to the horizon. This is America's back office.

 

Abundant land and cheap labor made Phoenix a premier place for companies to stash lower-paid office workers who don't need to be physically close to clients or headquarters. The cubicle-based jobs -- customer service, data entry, payroll processing -- created a vital ladder to the middle class, helping replace factory work lost to overseas competition.

 

Now, these white-collar jobs are fading, too, thanks to continued offshoring and, increasingly, artificial intelligence. Tens of thousands of local workers suddenly face an uncertain future.

 

A test grader saw her work outsourced to India. A customer-relations manager, recently laid off and his savings running low, is looking to become a bartender. Job-placement firms that supply companies with back-office workers are seeing less demand and are cutting their own staff, too. Those who still have jobs are increasingly leery of automation, even as it's become an unavoidable part of their days.

 

"I'm concerned that a lot of call-center workers will not have jobs pretty soon, me included," said Vonda Wilkins, a Phoenix-based customer-service representative.

 

Many of her co-workers lost their jobs last year as their employer, Lumen Technologies, relied more on AI to engage with customers and landline use continued to drop. The technology has made her work more challenging, Wilkins says: Customers who reach her often had to talk first to bots and are more likely to be in a bad mood. The 49-year-old is making plans to go to nursing school.

 

Offshoring has been chipping away at back-office jobs for decades. Yet around 16.5 million Americans work in office- and administrative-support jobs like customer-service reps and office clerks, according to the Labor Department. That's still more than the number working in manufacturing, but also down from around 18 million at the end of 2019. The number of customer-service representatives in metro Phoenix alone has tumbled 26% in the most recent four-year span the department measured.

 

Losses are expected to mount as AI takes over the kind of basic, repetitive tasks that are often back-office hallmarks. The Labor Department has projected employment in this broad sector will fall by 4% in the next eight years, the steepest drop among all major employment categories. That has major ramifications for the American working class.

 

Fifty years ago, factory jobs offered a path to the middle class for millions of Americans who didn't have college degrees.

 

As those jobs disappeared, lower-skill cubicle gigs helped fill the void.

 

Between 2000 and 2019, the number of people working in manufacturing fell by 26%, according to the Labor Department. During that period, full-time customer-service reps grew by 32%. The jobs were often easy to get, required little training and generally paid better than retail and fast-food jobs. They also offered better opportunities to advance.

 

Call-center gigs got people into corporate offices and taught valuable soft skills. That helped workers climb the ladder to higher-paying careers, said Mark Muro, senior fellow at the think tank Brookings Metro. Now, with those entry-level jobs disappearing, there's danger that "the pathways that provide mobility disintegrate and you lose the American promise of opportunity," Muro said.

 

Geoff McGehee, 54, was laid off from his job as a senior customer-relationship manager at Sears Home Services in October. Before he lost his job, the company was aggressively rolling out AI, and McGehee helped integrate it into the company's processes.

 

"I was literally digging my own grave," he said.

 

He's since applied for hundreds of back-office jobs, but hasn't had any luck. With his savings dwindling, McGehee started applying for bartending jobs and has considered training to become an electrician, which he considers more AI-proof. "At least I can rewire my house," he said.

 

The Phoenix cubicle boom kicked off in the 1960s, when American Express opened a regional office here, said Philip VanderMeer, an emeritus history professor at Arizona State University.

 

Advances in long-distance telephone lines and computer technology meant payroll, accounting and call-center workers no longer had to be in the same building as senior executives, making cheaper Sunbelt and mountain boomtowns an appealing alternative to pricey coastal business centers.

 

By the 1980s, the Arizona Republic's classified pages were stuffed with ads for jobs like insurance-claims adjusters, customer-service supervisors and associate auditors.

 

Even when Motorola -- a key Phoenix employer -- ran into financial trouble and semiconductor makers moved jobs overseas, the back-office economy kept growing, more than making up for the losses. The area shed more than 34,000 manufacturing and production jobs between 1999 and 2019. In that same 20-year span, customer-service workers more than tripled. Just before the Covid-19 pandemic, the metro area hit a milestone: For the first time, it had more customer-service reps than manufacturing workers.

 

The back office was a jumping-off point for Mary Foote, who now directs the Arizona Office of Economic Opportunity. She started working in a local Vanguard call center in 2006 shortly after graduating from Arizona State. She said she learned patience and communication skills there. Vanguard paid for her financial licenses, and she soon landed a better-paid job as a Morgan Stanley sales associate. She eventually added a Master's degree in public administration.

 

"It gave me a foot in the door," Foote said of her call-center beginnings.

 

Others stayed in call centers for decades.

 

Wilkins, the customer-service rep, landed her first call-center job with American Express in 1996. After three years she got a union job as a phone rep for a telecommunications firm that paid $17 an hour.

 

She bought a Nissan Maxima, went on cruises and supported her mother. When she had a daughter at age 28, she could easily care for her on a single income.

 

"I just didn't have a worry in the world," Wilkins said.

 

Not to say the work is easy. She currently works for AT&T 8.5 hours a day, starting at 4:55 a.m. in her home office. Callers are often annoyed by the time they reach her. Supervisors track how customers rate her in post-call surveys and monitor her hold times and how long it takes her to resolve an issue. Wilkins does resistance training in her spare time to cope with the stress.

 

Phoenix metro's customer-service workforce peaked during the pandemic as Americans ordered more stuff online, hitting 92,970 in 2021. But it quickly shrank to 68,930 in 2025, according to the latest federal labor-force data.

 

Mass layoffs are rarely the cause. Instead, companies have taken advantage of the industry's high churn, cutting head count by not replacing workers who quit or were fired, career-services professionals say.

 

For decades, Jeff Seifert's Tempe, Ariz.-based company Professional Placement/Pro-Tem Service has supplied local offices with accountants and customer-service reps, among other roles. Demand plummeted over the past year, although it's improved a little in recent months, he said.

 

Job seekers who walk through his door often complain about not getting any responses to applications. "I've heard tons of candidates call it a black hole," Seifert said.

 

It's hit their confidence -- and his business. He's contemplating branching out into skilled-trade professions like plumbers, which he considers less vulnerable to automation.

 

Phoenix has other irons in the fire: Data-center construction is booming, and Intel and TSMC are both expanding vast semiconductor factories. Suppliers are sprouting up around them. Developers are tearing down vacated call centers and replacing them with industrial parks and data centers.

 

But there are imbalances. Office- and administrative-support jobs are fading faster than manufacturing jobs are added. And the new blue-collar work is rarely a ready option for unemployed former office workers, according to employment-services professionals.

 

Chip-making jobs generally require specialized skills that former customer-service reps often don't have. Many new jobs get filled by foreigners or college graduates from other states. "Even the janitorial jobs there require a special certification," said Katrina Thurman, chief mission and education officer at Goodwill of Central and Northern Arizona, which helps locals get training and find job. She often tries to steer former customer-service reps to entry-level jobs in healthcare.

 

Local universities and community colleges have started offering training programs in AI and chip making. The state of Arizona supports apprenticeship programs that help get workers into skilled trades, among other initiatives.

 

In the 2010s Foote, the former Vanguard call-center rep, worked at the Greater Phoenix Economic Council. Early on she spent much of her time trying to get call-center operators to move to the region. Advanced manufacturing is now the priority. "The economy has evolved," Foote said.

 

Rebecca Savage is trying to keep up. She spent years hopping through headset-based jobs before struggling to find more phone work last year. She's holding out hope she'll someday land a gig in a semiconductor factory. "You have to wear a bodysuit, but I think I can do that," she said.

 

It would be a way for her to get on the other side of AI's career-changing rollout into America's labor force. She saw the effects first hand in customer service, when bots were taking over tasks like scheduling missed pickups for a sanitation company. "There were a lot of things that the phone system could do to basically replace us," Savage said.

 

For now, the 46-year-old plans to go back to school with the help of a local nonprofit to get trained in information technology. While tech jobs are also vulnerable to AI, she hopes having a degree or certification would give her more career opportunities.

 

Other workers are grappling with an older foe: outsourcing.

 

Since 2019, big, multinational companies have grown their offshore workforce by 36% -- more than 8 million jobs -- compared with a 17% growth in domestic employment, according to Revelio Labs. A disproportionate share of those jobs are remote-friendly, white-collar roles like customer-service reps, software developers and data specialists.

 

Tina Bigalk used to work 20 hours a week grading English-language tests used in U.S. school and college admissions. That work dried up in early 2025, when her employer outsourced the grading to India. She's been looking for a new part-time job but hasn't had any luck.

 

Her family can still live on her husband's income as a traffic engineer, and Bigalk earns some money selling homemade wreaths at farmers markets. Still, they've had to cut back on spending.

 

"We used to travel a lot," she said, "and it just doesn't happen anymore."” [1]

 

1. America's Back Office Is Disappearing --- Phoenix built an empire of cubicle jobs. AI is coming to tear it down. Putzier, Konrad.  Wall Street Journal, Eastern edition; New York, N.Y.. 28 May 2026: A1.