India’s GCCs trade headcount for specialised talent

Global Capability Centres (GCCs) are evolving towards smaller, specialized teams focused on artificial intelligence (AI) and product engineering, rather than expanding their headcount and global presence, according to a recent TOI report. The IT services export market in India, driven by GCCs, is projected to reach $100 billion by 2030, from $64.6 billion in 2024, with employment in the sector expected to surpass 2.5 million by the same period, as per Nasscom data cited in the report.

Smaller GCCs with parent companies having revenues under $100 million, considered smaller enterprises, constitute over 420 in India. These enterprises contribute significantly to the nation's IT services exports, with companies like McCain GCCs, DeloitteFoods, CoreStack, Blueshift, Veryon, Greenlight, and Ava Care playing a pivotal role. The shift is exemplified by Bose Professional's R&D center in Mangaluru, starting with a single employee, expanding to 25, and projected growth to 75.

Arindam Sen, GCC sector leader (TMT) at EY India, emphasizes that headcount should not define a GCC's strategic importance, citing factors such as access to specialized talent, faster product development, intellectual property ownership, and resilience. Lalit Ahuja, founder of ANSR, notes that AI enables companies to achieve more with smaller teams, enabling the establishment of teams of 20 or fewer with specialized capabilities.

These AI-native GCCs often have a core of 50%-70% of their workforce, with some reducing their initial workforce by 30%-50%. The shift in performance metrics includes faster time to market, improved quality, execution, reduced technology backlog, and taking on more high-value work.

Additionally, Nikita Goel, managing partner at Zinnov, points out that it takes approximately six years for a company with less than $100 million in revenue to reach the $100 million milestone. However, companies in AI, deep tech, and vertical SaaS can grow at an annual rate of 40%-70%, making headcount an inadequate measure of a GCC's significance.

The real focus should be on the value density of the team, whether they own a global product or a critical AI capability, and how swiftly the parent company starts routing strategic work to that center.