MNC captives halt hiring, cut pay in India to tide over Covid-19 crisis

These captives together employ more than 1.1 million people out of the total 4.3 million staffers in the Indian IT industry

Amid the Covid-19 pandemic, global in-house centres (GICs) or captives of large multinationals have halted new hiring. This is in line with the moves of Indian IT services firms, which have decided to add employees only on the need basis.   

According to experts, as most global enterprises are facing uncertain demand environment, their captives in India are also optimising costs through various means. Apart from hiring freeze, deferment of digital projects is among measures being taken by these GICs to tide over the crisis.

“Many of the GICs operating in India have put their hiring plans on hold. As situation is yet to improve in the US, UK and many other European nations, there is no clarity on demand environment, leading to such moves,” said Aditya Narayan Mishra, director and chief executive officer at CIEL HR Services.

Sources said salaries of employees working in some of these captives have also been cut, in sync with their global operations.

India is home to more than 1,300 captives with most of the Fortune 500 companies having their technology support and development work operating out of India. These captives are also a major source of employment for Indian engineers as they together employ more than 1.1 million people out of the total 4.3 million working in the Indian IT industry.
 

 

Of late, these GICs have also emerged as preferred employers among Indian techies because of higher salaries and better working conditions. Also, the lack of overseas opportunity amid restrictive visa regime of the US has made working with these captives attractive in recent years.

Given the engineering talent base of India, many GICs have also expanded their operations by driving new initiatives out of Indian centres. However, industry watchers said the scale of operation has taken a beating in the last three months. “Many of the new initiatives, mostly in the digital space, have been scaled down in recent months, though the ‘run the operation’ kind, comprising support and maintenance have not been affected,” said Pareekh Jain, an IT outsourcing advisor and founder of Pareekh Consulting.

He, however, added that GICs are likely to bounce back faster than the IT services firms once the pandemic is contained. “If work from home becomes an integral part of operations, then we should expect higher volume of new tasks to be done from these GICs,” Jain added.

Some GICs are also looking at exiting Indian operations by outsourcing their work to IT services firms in order to save cost. Earlier, in an interaction, Keshab Panda, CEO of L&T Technology Services, said the engineering services firm had been approached by some companies to take over their captive operations in India.