If you're going to be pedantic, at least be correct. The commonly understood meaning of 'outsourcing' is to use foreign labor. So commonly understood that even Webster includes it as part of their definitions:
: to procure (something, such as some goods or services needed by a business or organization) from outside sources and especially from foreign or nonunion suppliers
: to contract for work, jobs, etc., to be done by outside or foreign workers (https://www.merriam-webster.com/dictionary/outsource)
That does not jibe with common usage I hear in the field, despite what Webster says.
For example, young startups frequently outsource CFO functions to someone up the street.
To be truly pedantic, your definition doesn't say remote workers, just foreign, without specifying their region. OP talked about local workers in contrast.
Not only does the definition not say I am wrong (it includes the thing I said) but I was speaking in context of OP's comment (about location)
So you complained about my lack of precision and to do so you lost even more and didn't actually understand the context.
From my understanding (and Wikipedia agrees with me[1]), "outsourcing" simply means paying someone to perform work outside your company that the company would otherwise perform. For example, my employer outsources payroll to ADP, and outsources office cleaning to a service company rather than hiring its own cleaning staff.
[1] https://en.wikipedia.org/wiki/Outsourcing - "In business, outsourcing involves the contracting out of a business process (e.g. payroll processing, claims processing) and operational, and/or non-core functions (e.g. manufacturing, facility management, call center support) to another party."
: to procure (something, such as some goods or services needed by a business or organization) from outside sources and especially from foreign or nonunion suppliers : to contract for work, jobs, etc., to be done by outside or foreign workers (https://www.merriam-webster.com/dictionary/outsource)