Tech Sector Sees Surge in Workforce Growth
BENGALURU: India’s technology sector has experienced a significant workforce expansion, adding 120,000 jobs in the 2024-25 fiscal year. Global Capability Centres (GCCs) have played a pivotal role, contributing over 100,000 of these new positions, marking an increase from 90,000 in the previous year. Despite this growth, major Indian IT firms have been slower to hire, with only 11,000 new positions filled in the first nine months of the fiscal year.
GCCs Outpace Traditional IT Firms
The hiring trend indicates a shift in the tech landscape, with GCCs surpassing traditional IT firms in net hiring for the second consecutive year. The top five Indian IT services companies collectively added just 5,190 employees during the 2023-24 financial year. This contrasts sharply with the robust hiring by GCCs, which have emerged as key players in the industry. Currently, the Indian tech sector boasts a total workforce of 5.8 million employees, reflecting a dynamic shift in employment patterns.
As the industry anticipates reaching a valuation of $300 billion by 2025-26, the distribution of export revenues has also evolved. For the first time, the National Association of Software and Service Companies (Nasscom) reported an equal split in export revenues, with both MNCs, including GCCs, and Indian IT firms contributing $112 billion each.
Changing Dynamics in the IT Landscape
The current employment landscape in India’s tech sector is characterized by a transition from an employees’ market to an employers’ market. Major IT companies are grappling with single-digit growth rates and workforce reductions, while GCCs continue to drive employment growth. This shift is largely attributed to the transformative impact of artificial intelligence (AI), which is altering the traditional relationship between revenue generation and employment levels.
During the recent Nasscom Technology & Leadership Forum (NTLF), HCL CEO C Vijayakumar emphasized the importance of adapting to these changes. He warned that if the IT services industry views this transformation as an “existential threat,” it may hinder long-term success. The industry must embrace the evolving landscape to thrive in the future.
Collaboration Between IT Firms and GCCs
Cognizant CEO Ravi Kumar highlighted the collaborative potential between traditional IT firms and GCCs. He noted that advancements in AI are enabling teams to accomplish more with fewer personnel, creating a scenario known as Jevons Paradox. This phenomenon suggests that increased efficiency can lead to higher overall demand for resources, in this case, AI.
Kumar expressed a commitment to working alongside GCCs, stating that Cognizant is actively engaging with them to enhance productivity. Ramkumar Ramamoorthy, a partner at Catalincs, echoed this sentiment, describing the contrasting growth trajectories of major IT services companies and GCCs over the past year. Nasscom president Rajesh Nambiar reinforced the idea that both sectors can benefit from their respective strengths, fostering a synergistic relationship that can drive future growth.
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