India's global capability centre (GCC) sector is experiencing significant disruption as more than 25 GCCs were shut down in 2025, with numbers likely to double this year as enterprises reassess their value. According to data from Neovay, a significant number of India's GCCs have failed to become strategic hubs for their parent companies even after years of operations, leading to stagnation, layoffs, and aggressive bids from information technology services providers. Over 50% of GCCs in India are sub-scale, with the skillset being easily replaceable and lacking ownership across engineering, product or P&L functions. As reported by Business Standard, 30% of GCCs set up since 2021 have plateaued, translating to about 150 GCCs in the last five years, with more than 500 centres not fully realizing their potential.
Several high-profile companies have shut down their Indian operations, including Opendoor, the San Francisco-based online home-buying platform which laid off 250 people across Bengaluru and Chennai, and US grocery retailer Hy-Vee. Wells Fargo shut its centre in Chennai last year, leading to a few hundred people losing their jobs. Major layoffs have been witnessed at Oracle, Walmart Global Tech India, Aumovio Ford, and Fidelity Investments as companies downsize and make more investments in AI to improve productivity and efficiency. HCLTech is also buying US-based Guardian Life's GCC for $10.5 million, highlighting how service providers are now looking to acquire underperforming units.
The sector requires a comprehensive strategic reset focusing on shifting from product delivery to ownership, transitioning to outcome-driven execution, prioritizing niche talent over headcount, and consolidating fragmented systems onto a scalable tech and data platform. According to Neovay Global's Praveen Bhadada, many GCCs have historically done only commoditised work involving basic processes and need to prove their value to parent organisations. GCCs employ about 2.36 million people, with experts estimating 1.1-1.3 million engaged in repeatable work built on tickets, documents, and reports. With an attrition of about 13%, these roles are not being backfilled but shared between existing employees and agents.
A critical challenge lies in 80% of GCCs surveyed reported less than 10% of leadership roles based locally, with only 7% reporting senior leadership roles of 25-50% being based out of India. As reported by ISG, while 40% of Indian GCC leaders prioritize innovation, it remains the least priority for headquarters executives at 17%, creating an instant mismatch of objectives. 70% of companies still prioritize reducing staff costs through GCCs, highlighting the dual mandate challenge where GCCs must drive innovation while maintaining cost-effective operations. The sector's limited leadership presence, barring financial services companies, is a roadblock towards greater maturity and strategic influence for parent organizations.
The GCC sector, which contributes about $100 billion in annual revenue across approximately 2,100 centres according to Nasscom figures, faces significant transformation pressures. Early warning signs of plateauing GCCs include lack of product and platform ownership, rising execution friction, higher exits in niche roles, and high volumes of pilots with limited production deployment. Service providers who previously lost business to GCCs as work got insourced are now looking to acquire these units, believing they can run them more efficiently with service level agreement adherence. The sector's future success will depend on companies' ability to transition from cost-arbitrage models to strategic innovation hubs that can demonstrate measurable business impact within the compressed 12-18 month timeline now required by AI-driven business environments.
