GCCs Overtake IT Services in India’s Tech Hiring Landscape

What Happened

India’s technology sector witnessed a significant shift in labor dynamics during the 2024-2025 fiscal year. While the industry grew by 1.2 lakh (120,000) employees, the composition of this hiring has fundamentally changed. Global Capability Centres (GCCs), which serve as the internal technology and innovation hubs for multinational corporations, accounted for over 100,000 of these new roles. In contrast, traditional Indian IT services firms, which have historically been the primary drivers of employment, added only 11,000 employees during the same period. This marks the second consecutive year that GCCs have outpaced IT services firms in net hiring, signaling a structural transition in how India’s tech ecosystem operates.

Key Details

The disparity in hiring velocity between GCCs and IT services firms is stark. While the broader tech industry now employs 5.8 million people—up from 5.6 million in the previous year—the growth is increasingly concentrated within corporate-owned centers rather than third-party service providers.

To understand the scale of this shift, consider the following breakdown of hiring performance for the 2024-25 fiscal year:

This trend is not merely a temporary fluctuation but appears to be a long-term adjustment. For context, the top five Indian IT services organizations increased their collective workforce by only 5,190 employees during the 2023-24 financial year, highlighting a multi-year trend of hiring restraint. India currently hosts 1,760 GCCs, with a renewed strategic focus on high-value services and Engineering, Research and Development (ER&D).

Context

The Indian technology sector is on a trajectory to become a $300 billion industry by the 2025-26 fiscal year. However, the business models underpinning this growth are becoming increasingly dynamic. For the first time, Nasscom has reported an even distribution in export revenues of $224 billion, with multinational corporations (including GCCs) and Indian IT firms each contributing $112 billion.

This parity in revenue contribution, contrasted with the divergence in hiring, suggests that the traditional model—where revenue growth is tied directly to headcount—is breaking. The industry is moving from an "employees' market" to an "employers' market," where the primary goal is no longer pure volume of talent, but the efficiency and value generated by that talent.

Why It Matters

The primary driver behind this shift is the integration of Artificial Intelligence. AI is disrupting the linear relationship between revenue and employment, allowing firms to accomplish more with fewer people.

During the recent Nasscom Technology & Leadership Forum (NTLF), industry leaders addressed this transformation directly. HCL CEO C Vijayakumar suggested that the industry should stop obsessing over traditional hiring metrics and instead focus on value creation.

"That's absolutely the wrong question to ask. How can you create more value out of the 200,000 people? Can you create twice the value with the same number of people? It means the same thing. And if you challenge yourself in that direction, then I think the business will unlock a completely new growth."

Cognizant CEO Ravi Kumar further explained the economic phenomenon at play, citing the Jevons Paradox. This paradox occurs when technological progress increases the efficiency with which a resource is used, but the rate of consumption of that resource rises because of increasing demand. Kumar noted that with machines now writing roughly 20% of code, teams can execute more tasks with smaller personnel footprints, fundamentally altering the economics of the IT services sector.

Bottom Line

The era of mass hiring as the default proxy for growth in the Indian IT sector has effectively ended. As GCCs continue to expand their footprint in India, focusing on specialized, high-value functions, they are absorbing a larger share of the talent pool. Simultaneously, traditional IT services firms are navigating a period of single-digit growth and workforce optimization, necessitated by the efficiency gains of AI. The future of India’s tech sector will likely be defined not by how many people are hired, but by how effectively firms can leverage technology to decouple revenue from headcount.

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