Cost pressure takes toll on hiring at GCCs

Bengaluru Hiring by the Global Capability Centres (GCCs)is likely to be subdued in the current financial year as global enterprises are going slow on the overall hiring owing to cost pressure.

Experts and company official said most GCCs are consolidating their workforce after adding a good number of people post pandemic. Like some of their IT peers, HR experts, however, said replacement hiring is going on GCC space.

“Across the industry, hiring has been down. Though there are certain segments within GCC, where hiring is strong, but it is still lower than last year,” Supaul Chanda, Global Business Head of talent engineering firm- Otomeyt told BizzBuzz.

A report by industry body Nasscom shows that the country is home to 1,523 GCCs by the end of FY23. This number is likely to touch 1,900by 2025. As per EY study, these GCCs combinedly employ around two million staffers in the country.

GCCs have emerged as preferred employers in the eyes of engineers on the back of better compensation, work-life balance and career opportunities. Therefore, many engineers left their jobs from IT firms post the pandemic and have joined GCCs across the board.

But with overall slowdown in global economy, parents of these GCCs are facing cost pressure. Moreover, they want to consolidate their workforce.

“We have around 7,000 people in India across two cities- Bengaluru and Chennai. We have added around 1,000 people in the last year or so. We are looking at consolidating our workforce than adding more numbers,” VijaiKishan Radhakrishnan, Head of Personal Investing, India, &RegionalChair, Fidelity Investments India, told BizzBuzz.

Sources in the know said replacement hiring is taking place in GCC space, which is not the case in many IT firms.

“GCCs are hiring in certain technology areas. Replacement hiring is also happening. However, IT firms have kind of not adding headcount with very limited replacement hiring happening in recent quarters,” said a source.

The top four IT firms- Tata Consultancy Services, Infosys, HCL Tech and Wipro- have together seen a net reduction of 20,000 employees in the quarter ended June 2023 year-on-year basis.

While Infosys’ headcount fell by around 7,000 employees, Wipro’s headcount declined by 8,812 during the quarter.

Headcount for most mid-tier IT firms also declined during the first quarter. Things are not going to change for the rest of the year with no visible signs of improvement.