One of the impacts of the global recession is that it has compelled a number of countries to scale back their diplomatic representation overseas by closing some of their embassies. Faced with the economic and financial realities during economic downturns, governments often have little choice but to cut back on the spending that is involved in maintaining and operating embassies overseas. Not surprisingly, then, there has been discussion or debate as to whether embassies and resident diplomats are still needed or relevant in the 21st century. Globalization and rapid advances in information and telecommunications technology have connected billions of people. The conduct of diplomacy cannot be immune to this. It must change or at least adapt, so that it is more responsive and effective in this modern environment.

http://thediplomat.com/2013/09/04/do-we-still-need-embassies/