US layoffs would generate much work for India: CEO of GlobalLogic.

US layoffs would generate much work for India, according to the CEO of GlobalLogic.

Massive Tech US layoffs are anticipated to drive much business to India. The nation’s IT sector is expected to grow significantly during the downturn, according to a top executive of the based company GlobalLogic.

GlobalLogic President and CEO Nitesh Banga stated in an interview with PTI that the company is trying to hire talent in India and intends to increase its staff base by 25 to 35 per cent annually.

He claimed that even though there are many layoffs taking place, India will experience little of a slowdown.

“It is not because they don’t need to produce goods that Google, Twitter, Facebook, or any of these customers lay off workers. According to Banga, they still have work to do, and a lot of it will be done in India because they’ll need the talent to keep doing it even as they search for cost-saving measures.

In India, the IT company of the Hitachi group employs close to 15,000 people or almost 50% of its total global workforce. “We use about 1,000 people each month. Fifty per cent of that is in India. As a result, we regularly hire around 500 individuals in India. According to Banga, the number will continue to increase annually by 25% to 35%.

With two to three years of experience, the organisation hires engineers for the IT and IT-enabled service sectors, and then upskills them to become digital engineers.

Our job is advanced, in-depth product development, whether for embedded technologies, cloud, network, or apps. According to Banga, our work differs significantly from that of a conventional IT services provider.

He said that 80–90% of aviation and new generation efficient engines are designed in India, as well as the gesture-based automobile experience system that a premium luxury carmaker developed in Bengaluru.

According to Banga, in the next three years, foreign companies are reportedly planning 500 new GCCs (global capability centres) or engineering centres for India.

As a result, value arbitrage, skill, and talent capabilities are now the focus of the equation rather than cost arbitrage. The battle for talent has temporarily slowed. We do anticipate that India will continue to escalate in this talent battle.

Hitachi purchased the business in July 2021 for USD 9.6 billion. Banga claimed the addition of new industrial verticals like energy, railroads, transportation, and linked industries as a result of the integration with Hitachi.

“Whether you talk about Metaverse, Web3, digital supply chains, etc., much collaboration is happening across (with Hitachi). That’s one aspect of how our research and development (R&D) and theirs work together. The other component, though, offers inorganic thrust significant support as well. We, therefore, have high growth goals, according to Banga.

Sumit Sood, Group Vice President and Head of the Asia Pacific area at GlobalLogic, estimates that India makes up about 30% of the company’s overall sales.

According to Banga, GlobalLogic’s India business grew 20–25% up until roughly three years ago; then, it jumped to 30-35% over the following two years.

“It moves much more quickly. Nevertheless, I only look back three years to the last few years. In that case, we can already see that even if the company is expanding between 20 and 25 per cent, India is growing 5 to 6 per cent quicker and is continuing to develop.

According to him, India benefits significantly from this real economic slowdown from an IT or digital sector standpoint because the need for digital transformation will continue to exist across all industries. 

How would US layoffs generate a lot more jobs for India?

Due to the availability of a big pool of skilled labour at a lower cost in India, US layoffs could potentially increase work being outsourced there. When the economy struggles, businesses may attempt to cut costs and maintain competitiveness by outsourcing work to nations like India, where labour is far less expensive.

This pattern has been seen in the manufacturing, customer service, and technology sectors, where businesses have relocated their operations to India to save money.

Additionally, India’s status as a top supplier of IT and business process outsourcing services and its thriving startup culture make it a desirable location for businesses wishing to expand internationally.

Yet it’s crucial to remember that sending work to India is not a sure thing; other elements like automation, competitiveness and local recruiting can significantly impact where the piece is shipped.

Therefore, while there is a US Layoff, the job losses may increase the amount of work outsourced to India. This tendency is influenced by several factors. It is essential to take these aspects into account when projecting future results.

There are other reasons why job losses in the US layoffs can result in more work being outsourced to India in addition to the previously mentioned ones. India, for instance, has a sizable and quickly expanding middle class with rising spending power, making it a desirable market for US businesses trying to increase their consumer base.

Companies may find outsourcing to India an enticing choice to maintain their competitiveness in the global market due to the market potential and reduced labour costs.

With a large pool of highly qualified IT experts and a robust educational system that generates many engineering graduates each year, India also has a considerable competitive edge in the software development sector.

Due to this benefit, India is a popular outsourcing destination for businesses that outsource software development tasks, including app development, software testing, and maintenance.

The government’s backing for the sector is another element that may play a role in the rise of outsourcing to India. The Indian government has put laws and initiatives in place to entice international investment and foster the expansion of the outsourcing sector.

For instance, the government developed Special Economic Zones (SEZs) that offer businesses tax incentives and other benefits. The government has also started projects to upgrade the nation’s infrastructure, such as the Digital India programme, which aims to connect the country’s rural areas to high-speed internet and provide access to digital services.

While it is essential to consider all the variables that may affect this trend, job losses in US Layoffs may increase the amount of work outsourced to India. Factors that can encourage the growth of outsourcing to India include the availability of a sizable pool of skilled labour at a reduced cost.

India is a top provider of IT and business process outsourcing services, and the government supports the sector. Yet while speculating about the future of outsourcing to India, it’s also important to consider other aspects like competitiveness, automation, and local recruiting.

Edited by Prakriti Arora