New foreign firms to drive headcount growth of Indian GCCs

The Indian GCC (Global Capability Centres) ecosystem is going steady. The latest NASSCOM-Zinnov report showed that India will have 2,117 technology captives or GCCs by the end of FY26. These technology centres have also emerged as major employers in the Indian IT industry. About 2.36 million people are employed in these centres overall. Monetary contribution is also significant as these units have an estimated revenue of $98.4 billion by the end of FY26, which translates to around two per cent of the GDP. Importantly, this contribution is growing with each quarter as more foreign companies have set up their technology centres in the country.

Huge technology talent base, relative political stability, supporting government policies and cost advantage are the factors driving this trend. Going ahead, most analysts predict India to have close to 3,000 GCCs by 2030. Given the inflationary environment in the US and Europe, India may see a greater number of GCCs than estimated in the coming years.

Despite the positive story, several negative news are emerging regarding layoffs and these have raised concerns over sustainability of the GCC story. According to data sourced from UnearthIQ, over 5,500–6,000 GCC employees had lost their jobs last year across sectors such as engineering, automotive, aerospace, retail, and especially among the big tech giants. Big techs like Google, Microsoft, Oracle, Walmart, and Amazon among others had laid off staffers here. Similarly, Opendoor, Wells Fargo, Hy-Vee, Fidelity Investments and Ford others had also fired staffers last fiscal.

Most of them have downsized team sizes, while a few have shut down Indian operations all together. Such setbacks have created a fear about future employment prospects in Indian GCCs. However, most of these fears are overstated considering that the market is evolving and not shrinking. Globally, businesses are going through a period of deep uncertainty. Trump tariffs, ongoing war in the Middle East and Ukraine have led to serious disruption in the global supply chain. With crude oil prices rising, the economics of most businesses are facing pressure.

The US economy is not growing at the desired rate, and the European economies are reeling under the cost pressure since the Russia-Ukraine war. So, enterprises operating in these geographies must take various cost optimization measures. As a result, several American and European companies are downsizing their employee count and Indian GCCs of these companies also face the axe owing to these factors.

When parent entities of Indian GCCs fire employees, it is mostly happening across the globe than only in India.

Therefore, it can be seen as part of larger corporate restructuring than any India-specific action. Secondly, rapid adoption of AI (artificial intelligence) is leading to automation of several processes, which eventually increase operational efficiency. So, some layoffs are happening by companies owing to AI-led developments.

However, it doesn’t mean that Indian GCCs will continue to cut their headcount in future. Rather, global IT consulting firm Everest Group expects India’s GCC headcount to grow at approximately nine per cent annually over the next two years.

This is just a tad below the 10 per cent growth seen in the past few years. And the reason is that new foreign firms are planning to set up technology centres in India.

So, while old GCC units may consolidate their workforce, new ones will drive the headcount growth in the coming quarters.

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The Hans India