Europe’s back offices are shrinking. Small countries have already trained the workers who will survive

Illustrative picture, created by AI

Lithuania has more global business service centres than it did a year ago, but its reported workforce is smaller. In its 2025 report, Invest Lithuania, the state investment agency, counted more than 27,000 professionals across 100 companies. Its 2026 overview puts the figure at around 26,000 professionals across 105 centres.

The pattern is not exclusive to Lithuania. In Poland, the region’s largest hub, business-services employment has levelled off at about half a million. Exports per employee rose by more than $10,000 in 2025, according to ABSL, the sector’s industry association. The value of work is increasing at a faster rate than recruitment.

Bigbank chief economist Raul Eamets

The figures are not a perfect comparison and do not give specific indicators as to why the headcount has changed. But it fits a broader transformation visible across the sector, showing that software is absorbing more routine work, while the remaining roles require greater judgement, ownership, and cross-border communication. Workers from small, open economies have been developing precisely those skills for years.

Early evidence from the US suggests that the entry rung is changing more quickly. Stanford’s Digital Economy Lab found US employment falling among 22-to-25-year-olds in AI-exposed jobs such as customer service and clerical work. Writing in July, Raul Eamets, chief economist at Estonian bank Bigbank, summarised the shift bluntly: “jobs meant for juniors now require seniors’ knowledge and skills.”

Baltic Assist, a Lithuanian outsourcing firm, sees the same change from inside a back office. “When we started, a new accountant might spend months on data entry before ever speaking to a client,” says chief executive Andžej Rynkevič. “Most of that is automated now. Within weeks, our juniors work directly with finance teams in Scandinavia, the UK, or the US, handling rules that differ from country to country.”

Baltic Assist CEO Andžej Rynkevič

According to Rynkevič, over the past three years Baltic Assist has automated around 70% of its data entry work, while AI has helped increase output per employee by roughly 50%. Junior hiring fell by around half as well. “Even candidates for junior positions now have to demonstrate an ability to do more than an AI agent,” he says.

Size is what teaches this lesson at an early stage. In small open economies such as Lithuania, Estonia, Slovenia, or Denmark, exports of goods and services are worth approximately 70–85% of GDP. In Germany and France, the figures are 42% and 33% respectively.

Languages follow the same pattern. In 2022, more than nine in ten working-age adults knew at least one foreign language in 10 EU countries, including Lithuania, Estonia, Slovenia and Denmark. Germany and France were not on the list.

Small economies also lead on digital skills. The Netherlands, Ireland, Denmark, and Finland already exceed the EU’s 2030 target, while the EU average in 2025 was 60%. Lithuania’s young people are ahead of the curve: almost 81% of 16-to-24-year-olds had at least basic digital skills, against an EU average of 74.6%.

The obvious outlier is Germany. Its Mittelstand exporters sell on every continent, and a German machine-tool engineer is hardly provincial. But a company’s global reach is not the same as a worker’s. In a market of more than 80 million people, a graduate can spend years serving domestic customers in their own language before a foreign client becomes their problem. In a market of three million, that phase is short, even skipped entirely.

The small-market edge is not guaranteed either. Across its whole adult population, Lithuania still trails the EU on digital skills: 53.8% against 60.4% in 2025. Eamets also points out that AI is steadily easing language barriers in written work, which blunts one of the smaller countries’ traditional advantages. He warns that high-paying roles may go to experienced specialists recruited from abroad. And if AI keeps removing junior roles, small countries lose the very entry points where their workers used to gain early international experience.

For employers hiring across Europe, the lesson is to look for, and protect, what small markets tend to reward. That means people who have run one process for several countries rather than one country for several years. And it means teams with the authority to push back on headquarters.

Lithuania’s shrinking headcount can be read as a warning. But it may also be a preview of what many back offices in Europe will look like: fewer people, each doing work that crosses borders. Small countries never planned for that future but they simply never had the option of staying put.

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