GCCs In India To Get Into Cost Cutting Drive

If you see, many global cos, which have their GCCs in India, have reduced their headcount. So, such cost cutting measures will definitely percolate down to their Indian centres with a lag - Pareekh Jain, Founder of Pareekh Consulting, tells Bizz Buzz

Bengaluru: Indian GCC (Global Capability Centres) landscape may have to face cost cutting initiatives in the future as their global parents undertake such initiatives at their headquarters. Analysts are of the opinion that such cost cutting measures may reduce demand for headcount addition, which has been seen in India GCCs during the last two years.

They, however, said that such cost cutting moves may not be taken up immediately, but will happen with a lag in Indian centres.

“If you see, many global companies, which have their GCCs in India, have reduced their headcount (at their base geographies). This is true for most technology firms. So, such cost cutting measures will definitely percolate down to their Indian centres with a lag. Though it may not happen immediately, it will happen after some point of time,” Pareekh Jain, an IT outsourcing advisor & Founder of Pareekh Consulting, told Bizz Buzz.

Notably, Indian GCC landscape has been a success story as the biggest global companies have set up their technology centres in the country. In many cases, cutting-edge research and innovation work are being done from these centres.

India has witnessed a remarkable surge in setting up of technology captives in the country. It housed around 1,700 GCCs in FY24, generating $64.6 billion in exports. The segment has also emerged as one of the major employers of Indian technology talent by employing over 1.9 million people, according to the Nasscom-Zinnov report.

Cities like Bengaluru, Hyderabad, Pune, Gurgaon with several tier-II centre have emerged as preferred centres for opening up GCCs in India. Importantly, many global companies have formed multiple centres across the country, indicating the significance of these centres for global enterprises.

However, parent companies of many of these GCCs have reduced their headcount in recent years. Starting from Meta to Google to Microsoft; all major technology firms have taken up cost cutting measures in the US. Similarly, several European firms have also been taking such measures owing to inflationary pressures.

“Such cost reduction by parent companies will not be restricted to their base locations. With a lag, this will affect all their offshore centres including GCCs. Also, reduction of headcount by leveraging AI is a phenomenon playing out globally,” said source in the tech industry.

Meanwhile, GCCs in India remain the top employers in recent quarters, according to HR industry experts. Most expect this momentum to continue next year as more work gets done by Indian centres.