I just don't understand why offshore agenies are so prevalent. Surely hiring directly would be cheaper and gives your more control when you are hiring >1000 workers

About 10 years ago I worked for Fortune 500 company that had outsourced a bunch of its technical work to offshore contractors. New CEO and CTO came in and got rid of all the contractors, replacing them with talented US-based hires. Cut the size of our tech organization down from something like 12,000 (including contractors) to maybe 3,000. Our tech generally worked a lot better after that also.