The rapid rise of global capability centres (GCCs) in India is reshaping the country’s tech landscape and putting pressure on the traditional IT outsourcing sector. Once a dominant force in India’s export economy, the people-driven outsourcing model is now facing a slowdown, mass layoffs and shrinking growth, as multinational companies increasingly turn to in-house tech capabilities through GCCs.
GCCs, set up by global corporations to manage core technology functions internally, grew by 40 percent in FY24. In contrast, India’s top five IT firms reported negative to low single-digit growth and continue to post subdued numbers in FY25. According to industry estimates, GCC growth is expected to remain in double digits.
A structural shift is underway, driven by automation and artificial intelligence. “The pyramid is collapsing. GCCs are rising. AI is automating the middle. Pricing is shifting from effort to outcomes, and that means a full-stack transformation—not just of how services are delivered, but how they are sold, priced and measured,” said Saurabh Gupta, president at a US-based tech research firm.
Earlier this week, a leading Indian IT company announced plans to lay off around 12,200 employees due to low growth and AI disruption. A survey of over 200 enterprises revealed that more than 65 percent plan to shift at least 10 percent of full-time equivalent roles from third-party vendors to GCCs.
GCCs are growing rapidly due to access to skilled talent and cost efficiency in India. Last year, two new GCCs opened every week, taking the total to 1,700 centres with nearly 2 million employees. In FY25, they added over 100,000 new hires, compared to only 13,500 by top IT firms after a workforce reduction of 64,000 the previous year.
Banking, financial services and insurance (BFSI) is one of the most impacted sectors, as several multinational banks operate large GCCs in India. More than 50 BFSI GCCs run over 90 centres and employ 180,000 professionals, significantly impacting demand for traditional IT services.
Industry leaders say IT firms are now forming strategic teams to work alongside GCCs. “IT services companies which were once in denial about the impact of GCCs are today proactively forming crack teams to work alongside them to jointly shape and participate in their transformation and innovation agenda,” said Ramkumar Ramamoorthy, partner at a tech advisory firm.
Also read: Viksit Workforce for a Viksit Bharat
Do Follow: The Mainstream formerly known as CIO News LinkedIn Account | The Mainstream formerly known as CIO News Facebook | The Mainstream formerly known as CIO News Youtube | The Mainstream formerly known as CIO News Twitter |The Mainstream formerly known as CIO News Whatsapp Channel | The Mainstream formerly known as CIO News Instagram
About us:
The Mainstream formerly known as CIO News is a premier platform dedicated to delivering latest news, updates, and insights from the tech industry. With its strong foundation of intellectual property and thought leadership, the platform is well-positioned to stay ahead of the curve and lead conversations about how technology shapes our world. From its early days as CIO News to its rebranding as The Mainstream on November 28, 2024, it has been expanding its global reach, targeting key markets in the Middle East & Africa, ASEAN, the USA, and the UK. The Mainstream is a vision to put technology at the center of every conversation, inspiring professionals and organizations to embrace the future of tech.
