The headlines are dramatic. TCS cut 12,000 positions. Infosys and Wipro continue trimming benches. Nearly 99,000 tech employees lost jobs across 337 companies in 2024-25. Business news anchors are calling it a crisis.

It isn't.

If you're a CFO or founder at a foreign company still deciding whether to set up in India, the IT layoffs are not a warning signal — they are a window of opportunity that may not stay open for long.

The Layoffs Are a Symptom of a Structural Shift, Not a Collapse

India's IT services model was built on a simple premise: global companies outsource large chunks of work to Indian vendors — TCS, Infosys, Wipro, HCL — who staff up and execute. For three decades, this worked exceptionally well.

That model is now breaking apart. Not because demand for Indian tech talent has collapsed. But because global companies no longer want to pay the middleman.

They are cutting out Indian IT services vendors and setting up their own operations directly in India — faster, cheaper, and with full control over IP, roadmap, and team culture. The vehicle for this is the Global Capability Centre (GCC).

The numbers tell the story clearly: while leadership hiring at IT services firms grew just 2.4% in 2025, GCC hiring grew at 7.7% — more than three times faster. GCCs are forecast to increase hiring by 50% in FY2026. India now hosts over 1,700 GCCs, nearly half of all GCCs worldwide.

The talent isn't disappearing. It's migrating from outsourcing to in-house.

What This Means for a Foreign Company Considering India

The structural shift creates three specific advantages right now for Singapore, US, UK, or UAE-headquartered companies evaluating India entry.

Unprecedented talent availability. When TCS cuts 12,000 people, those engineers don't leave India — they look for the next role. The Foundit White-Collar Hiring Index hit an all-time peak of 347 in early 2025, up 32% year-on-year. Senior engineers and architects who would have been locked inside TCS or Infosys two years ago are now actively available to GCC operators.

Compressed hiring timelines. Engineers who would normally require 2-3 months to join are available in 30-45 days as notice periods and gardening leave cycles accelerate. For a foreign company needing to hire its first 20 engineers quickly, this matters significantly.

The build-versus-buy calculation has shifted. India's IT services prices have risen while the GCC model has matured. A properly structured Private Limited Company can be incorporated, payrolled, and operational within 6-8 weeks. The per-head economics now work at much smaller scale than five years ago.

The Goldman Sachs / HSBC Model Is Now Within Reach of Mid-Market Companies

India's GCC story started with giants — Goldman Sachs building a 9,000-person Bengaluru centre for quant finance, HSBC's Pune hub for AI banking, Google and Microsoft running their largest engineering offices outside the US from India.

The assumption was that this model required scale — Fortune 500 companies only. That assumption is now wrong.

The maturity of India's GCC ecosystem means a 20-person product engineering team or a 15-person data analytics centre is a completely viable starting point for a Series B company. The fixed costs of India entry — incorporation, FEMA compliance, payroll setup, initial office — are essentially unchanged whether you hire 15 people or 150. The per-head economics work at much smaller scale than they did five years ago.

The Sectors Where the Talent Migration Is Most Pronounced

AI and data engineering. Demand for AI/ML talent has increased by over 300% compared to 2024. IT services firms that built large data warehousing and BI teams now have engineers whose skills are exactly what GCC operators want.

Product and platform engineering. Full-stack engineers, platform architects, and product engineers from outsourced client projects are being actively recruited by GCCs that want to own their own product roadmap.

Fintech and BFSI. Goldman, HSBC, and JP Morgan running large India GCCs for years has created a generation of finance-domain engineers and quants — genuinely hard to find outside India at this depth and cost point.

The Window Is Real — But It Won't Stay Open Indefinitely

The IT services talent pool available now is a function of a specific moment in the industry's cycle. As AI workflows mature and GCC hiring absorbs the displaced talent, the current availability premium will compress over 18-24 months.

State-level GCC policies — Karnataka, Telangana, Maharashtra, Tamil Nadu — offer additional incentives for early movers: subsidised land, fast-track regulatory clearances, talent skilling programmes. These are designed to attract companies before the infrastructure is saturated, not after.

What a GCC Setup Actually Looks Like

Three parallel workstreams must happen simultaneously:

Legal and regulatory: Incorporating a Private Limited Company (WOS), filing FC-GPR with RBI within 30 days of share allotment, GST registration, registered office, India-resident director. Timeline: 4-6 weeks.

Intercompany structure: Intercompany Services Agreement, cost-plus transfer pricing policy (8-15% mark-up under TNMM), annual Form 48 (transfer pricing certificate under the new Income Tax Act, 2025) filing.

People operations: Payroll setup, EPFO and ESIC registration, salary structuring, ESOP structure if the parent's equity plan extends to India employees.

Our Ex-Big 4 CA team has incorporated and structured GCCs for companies across the US, UK, Singapore, UAE, and Germany. Book a free 30-minute consultation — our team responds within 1 business day.

Frequently Asked Questions
Is India actually cheaper than using an IT services vendor?+
For a sustained team of 15+ people, yes — typically by 25-40% on a total cost basis once you factor in vendor margins (typically 20-35%) versus the cost of running your own payroll. The crossover point is usually around 10-15 people and 18 months. Below that threshold, the setup costs and management overhead make outsourcing more economical.
How long does it realistically take to go from zero to a functioning GCC in India?+
A realistic timeline: entity incorporated in 7-12 working days, bank account open in weeks 3-4, first payroll run in week 6, intercompany agreement and transfer pricing policy in place by week 6-8. First engineer hired: typically week 4-6 after incorporation. Full team of 15-20 people: 3-4 months from decision to full operation.
Which Indian city is best for a tech GCC?+
Bengaluru has the deepest talent pool for product engineering, AI/ML, and fintech — but the highest salaries and real estate costs. Pune is strong for engineering and manufacturing-adjacent tech at 15-20% lower costs. Hyderabad is the fastest-growing GCC hub with strong government support. Chennai suits automotive-tech, logistics, and hardware. For most SaaS and tech companies, Bengaluru or Pune is the right starting point.
What is a cost-plus pricing model and why does it matter for GCCs?+
The India GCC charges its Singapore or US parent company for services rendered at total cost plus a mark-up of 8-15%. This mark-up is benchmarked against comparable Indian service companies and documented annually in a transfer pricing study. It must be certified by a Chartered Accountant via Form 48 (formerly Form 3CEB under the old Income Tax Act) by 31 October each year. Getting this wrong can result in transfer pricing adjustments — the most common and expensive India tax audit outcome for GCC operators.
Do Indian GCC employees have to be on India payroll?+
Yes. If the employees are based in India and working for the India entity, they must be on Indian payroll — subject to Indian income tax (TDS deducted monthly), EPFO contributions (employer 12% + employee 12% of basic salary up to Rs 15,000 ceiling), and ESIC contributions where applicable. Trying to pay India-based employees from a foreign payroll creates FEMA, PE risk, and income tax exposure that is expensive to remediate.
Can the India GCC team receive stock options from the foreign parent?+
Yes, this is common. Indian employees receiving ESOPs from a foreign parent company must comply with FEMA Schedule VI regulations. Perquisite tax applies at the point of exercise on the spread between fair market value and exercise price. This structure must be designed before the first ESOP grant — retrospective regularisation is complex and costly.
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