The Halting International Relocation of Employment (HIRE) Act, introduced in the U.S. Senate by Senator Moreno (Ohio) in September 2025, has set the stage for a major policy debate around outsourcing and offshore service delivery. It amends the U.S. Internal Revenue Code of 1986, imposing new taxes on outsourcing payments and denying deductions for U.S. companies that shift work abroad. For Global Capability Centers (GCCs), the ripple effects could be significant.
1. What is the HIRE Act?
At its core, the HIRE Act introduces a 25% excise tax on payments made by U.S. companies to foreign entities for services that ultimately benefit U.S. consumers. It also eliminates the ability for U.S. companies to claim tax deductions on such payments. In addition, it creates a Domestic Workforce Fund that channels the collected tax revenue into retraining and upskilling American workers.
2. Why was it introduced?
The bill aims to discourage the relocation of jobs overseas, strengthen domestic employment, and ensure U.S. taxpayers directly support job creation at home. It’s part of a broader reshoring agenda gaining traction in Washington.
3. What does this mean for GCCs?
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Immediate Impact: Rising costs for U.S. enterprises that depend on offshore delivery from GCCs.
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Medium-Term Impact: Clients may accelerate local hiring, invest in automation, and diversify sourcing geographies.
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Long-Term Impact: GCCs that are positioned as high-value innovation and transformation hubs will continue to attract investment, while those that remain cost-arbitrage-driven may see erosion in mandates.
4. Why should GCC leaders care?
This bill directly targets the outsourcing of services that many GCCs currently provide. While not all GCC activities fall under its scope, the policy sends a clear signal: global delivery models will face greater scrutiny, and only those demonstrating strategic value beyond cost savings will thrive.
The HIRE Act may still be a proposal, but its implications for global delivery are real. For GCC leaders, the priority should be clear: invest in innovation, strengthen local ecosystems, and demonstrate enterprise-level value. This isn’t just tax law — it’s a preview of the future landscape for global operations.
