<p>Offshoring is a central strategy through which firms reorganize their global operations, yet little is known about its unintended consequences for mental distress among onshore employees. Integrating the Transactional Theory of Stress and Coping with the offshoring literature, we theorize that offshoring elevates mental distress, as the event is perceived as a threat that is difficult to cope with. We further argue that the effect is not uniform but depends on conditions that amplify the perceived risk of job loss or constrain re-employment opportunities. To test these arguments, we construct a comprehensive employer–employee dataset from the Netherlands, in which mental distress is measured using psychotropic medication prescriptions. Our analyses reveal that offshoring leads to a substantial increase in the likelihood of psychotropic medication use among onshore employees, lasting up to three years after the event. Furthermore, the effects become more pronounced when offshoring is accompanied by layoffs and among low-to-medium-skilled, migrant, and older workers. Taken together, our findings highlight that offshoring entails nontrivial and durable human costs, particularly for employees who are most vulnerable to its consequences. For managers and organizations, these results underscore that offshoring initiatives require sustained and targeted efforts to mitigate mental distress and safeguard effective implementation.</p>