BENGALURU: The rise of India’s global capability centres (GCCs) was nothing short of meteoric. They continue to demonstrate a growing sphere of influence, not merely as execution engines but showcasing their ability to drive strategic initiatives. GCCs are expected to surpass IT services in hiring for the second year in a row, emerging as custodians of process and tech innovation for their parent organisations.
The top five Indian IT peers, on the other hand, experienced a modest increase in their workforce during the initial six months of the 2024-25 fiscal year, with a total of 13,000 new hires. This marks a notable improvement compared to the previous year, which saw a significant reduction of nearly 44,000 employees during the same period. However, with a quarter remaining for the year to end, industry experts believe hiring activity is expected to be muted.
Some IT firms, including Infosys, Cognizant, Wipro, and HCL, experienced a reduction in their headcount during the Sept quarter of the 2024-25 financial year. This deceleration represents a three-year pattern of decoupling of revenue and headcount, which has led to productivity gains. The shift stems from enhanced automation processes, improved productivity, and a conservative growth outlook, even as many IT firms are facing single-digit growth this fiscal year. Infosys’s headcount, for instance, dropped to 3.1 lakh in the Sept quarter of the current financial year compared to 3.4 lakh in the Sept quarter of 2022. Cognizant’s headcount dropped by nearly 9,000 to 3.4 lakh, while Wipro’s dropped by 29,000 to 2.3 lakh during the same period. Apart from TCS, other IT firms have shown muted hiring activity.
Last fiscal year, the Indian IT sector saw a net addition of 60,000 people, taking the total tally to 5.4 million. IT industry body Nasscom did not break this up, but given that the big IT firms saw a decline in headcount, much of the net addition was on account of GCCs. A recent Nasscom-Zinnov report said the number of GCCs is expected to grow to 2,200 by 2030, employing 2.5 to 2.8 million employees. It currently employs 1.9 million people. In 2022-23, GCCs added 2.8 lakh employees, taking their talent base to over 1.6 million.
When TOI asked Nasscom about GCCs marching ahead of IT firms in terms of net additions, the IT industry body said, “As per data analysed of listed technology services companies, net employment increased by over 20,000 in the first half of the year and many companies have also commenced fresher hiring. GCCs have continued their growth momentum and continue to be a source of job creation for technology professionals. Nasscom is currently in the process of analysing all the different industry sectors and their performance in the year and will publish this in Feb 2025.”
GCCs set to outshine IT companies in hiring
Ramkumar Ramamoorthy, partner at tech growth advisory firm Catalincs, said that given many IT companies are caught in a low single-digit growth cycle for the second year in a row, the moot question is whether these companies are reinvesting enough into the business to maximise market share rather than maximise margins. “With hundreds of billions of dollars locked into opportunities driven by structural shifts in technology and business-including cyber security, AI, cloud, and GCC-companies need to make outsized investments to leap into the future rather than play by yesterday’s rules. Only when they do that, will we see growth bounce back, leading to a robust increase in revenue, profits, and net headcount addition.”
Phil Fersht, CEO of IT research and advisory firm HfS Research, said, “Our study of 1,800 IT services employees last year revealed widespread dissatisfaction, while many feel under-challenged and ready to jump ship. The problem with the services industry is that when companies provide outsourced services for enterprise customers, it’s most often the monotonous tasks the customer can offload at scale, such as application testing, infrastructure monitoring, accounts payables, or receivables.”
Fersht said GCCs are reversing this trend by offering up to 30% higher salaries, often more challenging roles, and opportunities to work with cutting-edge technologies and prestigious institutions. GCCs are making IT services desirable once again. “This resurgence in interest is not only enhancing GCC capabilities but also elevating the entire
Indian IT industry, especially during these challenging times for its traditional outsourcing market.” Peter Bendor-Samuel, CEO of US-based Everest Group, believes there is a growing need for more internal control as firms move to focus on technology-driven transformation. “This new realignment is in the early stages, and we expect a growing movement of estates from third-party to GCC, as well as much of the new scope moving into the GCCs.
