In principle, outsourcing makes things a little cheaper and increase profitability. However, some things need to be done 'in house'. For example, some employers (largely) outsource recruitment to key posts. The people making the decisions may be good at picking bright people, but they often do not really know what is needed by the employer. In Britain, it often said that corporations 'hire people who are good at getting jobs but bad at doing them'. To the extent that this is true, it is damaging for all concerned.
