Global firms bring more work in-house at India hubs as AI reshapes workflows and hiring

Global firms bring more work in-house at India hubs on AI boost

BENGALURU, May 26 (Reuters) - Global companies are bringing more work in-house at their India cost centres as AI boosts productivity and reduces reliance on outsourcing partners, executives at a Reuters summit in Bengaluru said. The shift reflects a structural change in how multinationals use their India operations, moving beyond cost-focused support roles to centres that own core functions such as engineering, product development and analytics. At Daimler Truck's (DTGGe.DE), opens new tab Bengaluru hub, the company is bringing development of core software and performance-critical algorithms in-house, said Radhakrishnan Kodakkal, head of its innovation centre in India. The automaker is prioritising internal control over areas that provide a "competitive" edge, particularly software that directly influences vehicle performance and safety, he said. Daimler Truck will retain activities it considers core and ongoing, he said, while turning to external vendors for functions that fluctuate at the project ⁠level. U.S. retailer Target (TGT.N), opens new tab, which employs more than 5,000 people in India, already relies heavily on internal teams. "We do the vast majority of our tech in-house already," Target India head Andrea Zimmerman said, adding that external partners mostly "provide flexibility." IN AI THEY TRUST While low costs initially drove the growth of India's global capability centres, AI is now shaping how far they move up the value chain, enabling companies to handle more work internally without proportional hiring. At IBM (IBM.N), opens new tab, automation has allowed the company "to do a lot more with the same complementary people," India head Sandip Patel said. The shift is also evident in how work is distributed globally. Danish drugmaker Novo Nordisk's (NOVOb.CO), opens new tab Bengaluru centre is playing a growing role in global drug launches, handling more preparatory work, including for its recently launched oral obesity pill in ⁠the United States. "A good proportion of the work for any market (launch) would be done out of the India centre. There's probably not a medicine launched anywhere in the world that hasn't had a thumbprint of Bengaluru on it," said John Dawber, managing director for global business services. Enterprise software firm Workday (WDAY.O), opens new tab said its India teams are increasingly responsible for end-to-end product delivery rather than supporting individual modules, signalling a move away ⁠from fragmented, outsourced work models. U.S. retail group Catalyst Brands said companies are also stepping up investments in internal talent. "Most players in the market ... are investing in in-house talent to be able to create capabilities," said Nihar Nidhi, Catalyst's India managing director. Even among firms that continue to use ⁠vendors, the balance is shifting. Instead of long-term outsourcing contracts, partners are increasingly engaged for specialised skills or faster execution, while strategic ownership remains internal. Executives said the trend was still evolving and unlikely to eliminate outsourcing. But as AI reduces routine work ⁠and raises the premium on speed, control and integration, global firms are steadily expanding what they do in-house. "Essentially, we are able to do significantly more with the same set of people that we have because of the power that AI brings in," Epsilon India Managing Director Pratik Nath said. Reporting by Abinaya V in Bengaluru; Editing by Dhanya Skariachan and Anil D'Silva Our Standards: The Thomson Reuters Trust Principles., opens new tab

Global centres in India slow hiring as AI reshapes work, ANSR CEO says

BENGALURU, May 18 (Reuters) - Global capability centres in India are taking a measured approach to hiring as companies are wary about the impact of geopolitical uncertainties and growing AI adoption, the CEO of ANSR, which helps firms build and run global centres, said. India is home to more than half of the world's global centres as companies prefer its large skilled workforce, lower operating costs and rising ability to support high-value jobs across technology, finance and engineering. However, the rise ⁠of artificial intelligence could test that edge by reducing headcounts for some roles and reshaping the kind of work global centres do. "There is a sense of cautiousness," Lalit Ahuja, also the founder of ANSR, told Reuters on Monday. "Companies are hiring fewer people, just as a matter of abundant caution." ANSR counts FedEx (FDX.N), opens new tab, Target (TGT.N), opens new tab and Lowe's (LOW.N), opens new tab among its clients. Ahuja says that hiring is being slashed by 30% to 50%, with some firms that had planned global centres with more than 5,000 employees scaling those ambitions back to ⁠about 2,000. He did not give further details. India is expected to host nearly 2,200 global centres and a talent base of 2.36 million by the end of the fiscal year that ends in March, IT industry body Nasscom and consultancy Zinnov said in a report this month. FLEXIBLE ⁠WORKFORCE With hiring by large global centres subdued in the near term, new entrants would drive growth, Ahuja said, as companies build a core workforce, alongside a larger flexible pool that can ⁠be scaled up or down based on business needs. That reflects growing fatigue with a "wait-and-watch" approach, as companies choose to hire fewer people than planned, begin work on a ⁠smaller scale and see how it evolves. "Companies are now undertaking bold experiments," Ahuja said. "You can always hire more, but it's always difficult to let go of people." Reporting by Haripriya Suresh and Shivansh Tiwary in Bengaluru; Editing by Mrigank Dhaniwala Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * World at Work * Employment * Employee Health Haripriya Suresh Thomson Reuters Haripriya reports on India's $254-billion Indian information technology (IT) industry, the country's burgeoning GCCs, as well as new-age startups. With seven years of experience, she has previously reported on politics, civic issues, crime, and breaking news in south India, and tracked the country's gig economy. She has a degree in Media Studies with a specialisation in journalism from the Symbiosis Centre for Media and Communication. Shivansh Tiwary Thomson Reuters Shivansh reports on major aerospace, aviation, and industrial companies in the United States. A journalism graduate from Christ University in Bangalore, he specializes in breaking news and quarterly earnings reports for the country's largest airlines and machinery manufacturers. His work is often featured in Reuters' Aerospace & Defense and Autos & Transportation sections.

GCCs switching to smart workflows as AI gobbles up procedural grunt work

Industry experts said AI is shrinking junior-level workflows, reducing standalone procedural functions and pushing multinational companies to redesign the kind of work handled by their India centres. Early industry estimates suggest nearly 18% of India's GCC work still sits in commoditised, process-heavy functions that are increasingly being automated, embedded into AI-driven workflows or rebuilt by AI-native firms, marking a structural shift in the country's largest white-collar employment engine. India's nearly $100-billion global capability centre (GCC) industry is at an inflection point where hiring is rising, but "portfolio hollowing" has begun. Artificial intelligence is compressing repetitive functions across customer support, finance, Human Resources, analytics and software operations, even as companies continue to expand and add headcount, experts told ET. Industry experts said AI is shrinking junior-level workflows, reducing standalone procedural functions and pushing multinational companies to redesign the kind of work handled by their India centres. Early industry estimates suggest nearly 18% of India's GCC work still sits in commoditised, process-heavy functions that are increasingly being automated, embedded into AI-driven workflows or rebuilt by AI-native firms, marking a structural shift in the country's largest white-collar employment engine. According to a recent report by global consulting firm Zinnov, nearly 55% of global GCC portfolios are exposed to AI-led disruption, with procedural and commoditised work carrying the highest risk. "Our analysis of 1.7 million-plus job descriptions across 60-plus countries puts India's commodity share at 17.7%, far below competing GCC locations like the Philippines at 40.1% and Costa Rica at 41.1%," said Pari Natarajan, chief executive officer at Zinnov. The hollowing is most visible in finance and HR, where AI has moved from pilot to production. Invoice processing cycle times have fallen from seven days to one day, financial closing process from 12 days to five days, and headcount requirements for these functions by 75%. HR self-service is now resolving 70-80% of queries without human intervention. In software development, output per developer has improved 40-80%. "These aren't pilot numbers, they're production benchmarks," said Vikram Ahuja, co-founder, ANSR, a GCC enabler. The shift is emerging as a critical transition point for India's GCC ecosystem, which has expanded to more than 2,100 centres employing over 2.3 million people. Industry experts said the disruption is showing up less through large-scale layoffs and more through changes in the composition of work itself. Over 70% of GCCs are now explicitly tasked with driving their parent enterprise's global AI mandate, and AI hiring across GCCs has surged 131% year-on-year. Companies setting up new GCCs today are planning for 20-40% fewer employees than they would have three years ago, while expecting more output. Enterprises are increasingly prioritising hiring for AI, data, cybersecurity and product engineering roles, while functions such as marketing operations, customer support, finance processes, procurement, talent sourcing and repetitive analytics face the most exposure to AI-led restructuring. "The signal isn't shrinkage, it's recomposition," said Arindam Sen, partner, EY India. He said companies are moving away from broad-based volume hiring toward specialised, capability-led roles as AI automates routine tasks across finance operations, HR processes and IT support functions. Sen added that operations-heavy work faces direct substitution risk from AI, while engineering-heavy work is seeing augmentation, where productivity per engineer rises and the junior end of the workforce pyramid gets compressed rather than eliminated. "The enterprise priority has clearly moved from how cheaply can this centre run to what can this centre build," he said. Yet the transformation remains uneven. Only 37% of GCCs are running active AI pilots, and 40% of agentic AI projects are projected to be cancelled due to unclear returns and inadequate governance. Gaurav Vasu, founder of UnearthInsight, a market research platform, said there is still limited evidence globally of wholesale elimination of enterprise functions. "AI is changing how work is delivered and improving output efficiency, while selectively reducing highly repetitive layers of work," he said. Vasu added that many enterprises are still evaluating the economics and scalability of large-scale AI deployment, and most core functions across compliance, governance, scientific research and product development continue to require strong human oversight even as procedural workflows gradually shrink. India's structural strengths, including engineering and AI talent at scale and the institutional depth to run enterprise-grade operations, give it a long-term edge. But Ahuja noted that advantage is not guaranteed. "The advantage is structural for those moving up the value hierarchy. It's temporary insulation for those that aren't," he said. GCCs still predominantly running standardised processing, even complex processing, face a different trajectory, he added.

From diapers to drugs: How India's global corporate hubs are putting AI to work

May 28 (Reuters) - Whether they are recruiting the ideal "momfluencer" to sell diapers or trawling through reams of data to fast-track drug launches, global centers of multinational firms in India are increasingly putting AI to work in creative ways. Heads of several Global Capability Centres (GCCs) told Reuters they are deploying AI across a host of functions - from marketing and content creation to finance and human resources - to automate time-consuming, repetitive tasks that once required hours of manual effort. And the ambition doesn't stop there. AI has moved well beyond chatbots and into the corporate engine room - with GCCs leveraging the technology to drive far-reaching innovations. For example, Indian hospital chain Apollo Hospitals has adopted an AI clinical assistant developed with Microsoft that helps doctors gather patient data and generate insights quickly. "That is 20% time given back to doctors. That is 20% time back to patients," said Puneet Chandok, president of Microsoft India and South Asia. Teams at the Bengaluru center of Catalyst Brands, the owner of U.S. department store chain J.C.Penney, are piloting computer-generated imagery to create product visuals and videos. AI could reduce the need to move inventory across the globe for photo shoots, said Nihar Nidhi, India managing director at Catalyst, adding Bengaluru is "at the nose of the rocket" in piloting such prototypes. Huggies diaper maker Kimberly-Clark, too, is using AI to speed up marketing processes, including an internal tool that helps identify and evaluate social media influencers to promote its products and expand reach. DRUGS DATA TO EXPENSE REPORTS Denmark's Novo Nordisk is deploying AI across critical parts of the drug launch process, including drafting regulatory documents, analysing safety data and supporting commercial analytics. That is in line with efforts from drugmakers globally, from Amgen to AstraZeneca, which are deploying AI to identify trial participants more quickly and cut the time needed to produce drug safety reports, potentially saving millions of dollars. At IBM India, engineers have tied up with a top college and local authorities to introduce AI-enabled air-quality monitoring systems. IBM is also working with the government to explore AI adoption and help with upskilling initiatives. Workday India President Sunil Jose said the business software maker was increasingly working alongside global teams to build AI tools for payroll, hiring and finance operations. "For us, it's no more about saying - hey, we're part of that rubric where we'll build a few modules in the Lego module. It's about building the entire model together," Jose said, underscoring the role GCCs play in large corporations' operations. (Reporting by Shivansh Tiwary, Praveen Paramasivam and Aishwarya Venugopal in Bengaluru; Editing by Sweta Singh and Saumyadeb Chakrabarty) By Shivansh Tiwary and Praveen Paramasivam

India's GCC model shifts from cost to capability as AI, talent strains bite

BENGALURU, May 27 (Reuters) - For two decades, India's dominance in global capability centres rested on a simple formula: skilled talent at scale, at low cost. India is now the world's largest GCC hub, with more than 2,100 centres employing 2.36 million people and generating nearly $100 billion in revenue, a 2026 Nasscom-Zinnov report said, adding the "workforce remains India's greatest strength." Executives at the Reuters summit in Bengaluru echoed that view, saying global firms continue to expand in the world's most populous nation because its depth of talent is hard to match. "There are not too many alternatives for companies," said Lalit Ahuja, the CEO of ANSR, which helps global firms build and run GCCs. But the model is shifting. Executives say GCCs are no longer back-office support units but integrated hubs that mirror their parent companies. They manage various functions ranging from technology to product support and analytics to corporate affairs, and are increasingly judged on outcomes rather than cost. At several firms, Indian centres now lead global programmes and handle end-to-end work, from product development to complex commercial and R&D processes. In some cases, work once anchored at headquarters is now owned and executed from India. Microsoft India head Puneet Chandok said the country's edge rests on its massive digital public infrastructure, a talent pool of 27 million developers on GitHub, and policy openness that allows firms to scale quickly. Target operates in Bengaluru as an "integrated headquarters" aligned with its global strategy, while IBM describes its India operations as a "macrocosm" of the enterprise. COST PRESSURES AND TALENT STRAIN As GCCs move up the value chain, rising costs and talent shortages are testing the model. Bengaluru, where most of the GCCs are located, faces civic constraints such as congestion and higher costs, as well as intense competition for talent. Target executive Andrea Zimmerman described the battle for talent as "unreal". Demand for AI and machine learning skills is outstripping supply, fuelling wage inflation. Danish drugmaker Novo Nordisk executive John Dawber said salaries in some tech roles are rising 40% to 50% annually, threatening to erode India's cost advantage. "If costs go out of control, we start to lose one edge of the triangle of your value proposition," he said. Companies are also hedging risk. Kimberly-Clark executive Deena Dayalan pointed to an "India plus" strategy, with firms expanding into Poland, the Philippines, Brazil and Costa Rica. INFLECTION POINT AI is reshaping work, enabling more output without adding headcount and weakening the link between growth and hiring, even as adoption lags behind its rapid advances. "In six to 12 months, we are nearing that inflection point," Ahuja said. Many firms are shifting workers into higher-value roles and investing in re-skilling as hiring slows, though gaps in data, governance, infrastructure and employee readiness continue to delay adoption. For India's GCC sector, this marks a turning point, with AI-first centres accelerating while older ones are forced to adapt. The country's scale remains an advantage, but its edge will hinge on how quickly it adjusts to rising costs, infrastructure constraints and global competition. (Reporting by Chandini Monnappa in Bengaluru; Editing by Dhanya Skariachan and Anil D'Silva)