17JUL

India IT grows 140,000 as US firms cut

3 min read

14:01UTC

NASSCOM reported India's IT sector grew net by 140,000 to 5.9 million in fiscal 2026, with the growth concentrated in in-house offshore offices run by the same US firms cutting at home.

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Key takeaway

India's IT sector grew to 5.9 million as US firms moved cut roles into their own offshore offices.

NASSCOM, India's IT industry body, reported the sector grew by about 140,000 workers to 5.9 million in fiscal 2026, even as the top five outsourcers cut a combined 6,981 jobs ¹. The growth sits in GCCs (Global Capability Centres, in-house offshore offices), run by firms including JPMorgan, Goldman Sachs, Apple and Walmart, the same companies executing US cuts.

NASSCOM's net figure makes the magnitude concrete for the first time, building on its earlier finding that GCC expansion sits outside US disclosure regimes . The same firms appear on both sides of the ledger: in the US-cut data and in the NASSCOM GCC-growth data. A role cut in Texas and recreated in Bengaluru shows up in US WARN filings as a loss and in no US instrument as a transfer.

This is a third measurement gap stacked on the others. Declared layoffs miss hires never made; JOLTS (the Job Openings and Labor Turnover Survey) misses the same; neither tracks hires made offshore. Entry-level Indian IT hiring fell 20-25% even as the sector grew, so the channel rewards mid-career transfers and closes the graduate door at both ends, in Texas and in Bengaluru alike.

Deep Analysis

In plain English

Big US companies like JPMorgan, Goldman Sachs, Apple, and Walmart have been cutting jobs in the US while opening larger offices in India. These Indian offices are not run by outsourcing firms like Tata or Infosys; the US companies run them directly, using their own employees. India's IT sector grew by 140,000 jobs to 5.9 million in the year to March 2026. At first glance that sounds positive. But the growth happened at in-house US company offices, while traditional Indian IT firms that previously provided outsourced services cut nearly 7,000 jobs. Graduate hiring fell 20-25% even as the total workforce grew. Indian graduates entering the IT sector normally found jobs at outsourcers. Those outsourcer roles are shrinking, and the new GCC roles require experienced specialists rather than new entrants. None of these transfers appear in US job-loss statistics, because the moves happen between branches of the same company.

Deep Analysis

Root Causes

GCCs trigger no US WARN Act filing because the transfer is between affiliates of the same company, not a mass layoff at a single US site. They do not enter Stanford's JOLTS analysis because JOLTS measures domestic job openings and separations. WARN Act, JOLTS, and BLS payroll surveys each fail to capture the channel for separate structural reasons.

Entry-level hiring fell 20-25% even as the sector grew because GCCs require mid-career specialists, not graduates. India's IT sector previously absorbed roughly 300,000 graduates a year through mass fresher hiring at outsourcers. That model is being replaced by one that absorbs only workers with five-plus years of enterprise experience.

Escalation

NASSCOM's FY2026 data makes the GCC channel concrete with a named magnitude. The next escalation point is whether US congressional staff or the Bureau of Labor Statistics develop a GCC-tracking methodology that makes the channel visible in domestic statistics.

What could happen next?

Consequence
India's 20-25% drop in entry-level IT hiring despite net sector growth closes the graduate employment pipeline that has absorbed 300,000 Indian engineering graduates annually for two decades.
Medium term · Assessed
Risk
GCC transfers are invisible to every existing US AI displacement metric (WARN Act, JOLTS, BLS payroll), meaning official US job-loss counts structurally understate the offshore transfer component.
Short term · Assessed
Opportunity
NASSCOM's decision to publish GCC growth data separately from traditional outsourcer data creates a statistical foundation for a bilateral US-India transfer disclosure framework.
Long term · Suggested

Source Landscape

This story draws on neutral-leaning sources

Primary parallel: The 1990s IT outsourcing wave saw IBM Global Services, EDS, and Accenture build captive delivery centres in India, gradually replacing the direct-employment offshore model with full outsourcing. JPMorgan, Goldman Sachs, and Apple are now reversing that pattern: bringing work back in-house via GCCs rather than leaving it with Infosys or TCS. The structural inversion means the same companies that built the outsourcing industry are now disintermediating it.

Counter-parallel: The manufacturing offshoring wave to China in 2001-2010 produced net employment statistics that showed job gains in Chinese factories while US manufacturing employment fell. The aggregate statistics were accurate but politically catastrophic: the US lost 3.7 million manufacturing jobs in the decade, while aggregate trade data showed growing bilateral commerce. The GCC data risks producing the same statistical normalisation of a politically significant transfer.

The six-month India-to-US cost differential for an equivalent mid-career software engineer role runs at approximately 3:1, making GCC transfers economically self-funding within 12 to 18 months of set-up costs.

JPMorgan, Goldman Sachs, Apple, and Walmart all appear in both the US cuts data and NASSCOM's GCC growth figures, confirming the same capital is being redeployed rather than saved.

Consensus view: NASSCOM's own research team and the Indian Council for Research on International Economic Relations (ICRIER) identify the GCC expansion as a structural bifurcation within India's IT sector: the in-house captive model is growing while the traditional outsourcing model (TCS, Infosys, Wipro) contracts.

Net growth conceals divergent outcomes for Indian workers: GCC roles pay 30-40% more than outsourcer equivalents but require mid-career skills, closing the entry-level door that previously absorbed 300,000 graduates a year.

Counter-view: Bruegel economist Reinhilde Veugelers and trade researchers at the Centre for European Policy Studies argue the GCC expansion does not represent a genuine transfer of employment: the roles created in Indian GCCs require different and higher skill levels than the roles being eliminated in the US, so the same individuals who lose US positions are not the ones gaining Indian GCC roles.

The net employment number obscures a skills mismatch that both jurisdictions will have to resolve.

Key tension: Whether the GCC channel represents a global labour reallocation that serves aggregate economic efficiency, or a measurement-invisible transfer that benefits multinationals and mid-career Indian engineers while harming US workers and Indian graduates simultaneously.

Sources:ONS (Office for National Statistics)

Mentions:NASSCOM →Global Capability Centre →JPMorgan Chase →Goldman Sachs →Apple →Walmart →Bruegel →Wipro →India →Infosys →Texas →Accenture →China →Job Openings and Labor Turnover Survey →

First Reported In

Update #11 · Markets now reward the cut, punish the freeze

ONS (Office for National Statistics)· 1 Jun 2026

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Causes and effects

Caused by

India's GCCs absorb the offshored work

NASSCOM's May FY2026 data makes the offshore GCC magnitude concrete, building on the earlier finding that GCC expansion sits outside US disclosure regimes.

Occurred 15 May 2026

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This Event

India IT grows 140,000 as US firms cut

The offshore Global Capability Centre channel is a measurement gap no US labour instrument can see, recording cuts as losses and never as transfers.

Led to

Wipro hired into its own hiring freeze

The GCC-driven net growth in Indian IT employment contextualises Wipro's net headcount addition against its own hiring pledge.

Occurred 16 Jul 2026

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Different Perspectives

Stanford's 'We Must Act Now' signatories

More than 200 academics, including 16 Nobel laureates, published a 13 July letter warning of AI-driven labour disruption, citing Daron Acemoglu's NBER estimate that AI's total factor productivity gain stays under 0.66% over ten years. The letter's own cited economics sit well below Goldman Sachs Research's 1.5-percentage-point estimate published the same week.

Germany / the Bundesrat

Germany's Bundesrat acted on the EU AI Act's employment provisions on 10 July, more than a year ahead of the Act's 2 December 2027 enforcement deadline. Germany is moving on statutory AI-employment disclosure while the US Congress and Federal Reserve have no equivalent instrument.

Indian IT services sector (TCS, HCLTech, Wipro)

TCS cut 19,271 roles and HCLTech cut 3,292 in the same reporting week that Wipro's headcount rose by 888 under its own zero-fresher-hiring pledge for FY27. The divergence shows attrition, not layoffs, is how India's outsourcers absorb AI-driven project compression while their net headcount numbers stay ambiguous.

Federal Reserve

Barr said on 14 July there is little evidence of AI displacement, citing a 43-versus-10 adoption gap by education; Cook said the next day the dire predictions have not come to fruition, her text carrying none of the bond-spread language she used in May. The Fed reads AI's labour effect through national aggregates, where four banks' cuts remain statistically invisible.

Barclays

Barclays economist Pooja Sriram flagged a 28,000-a-month bleed in finance and information roles the same week Microsoft disputed that AI drove its own 4,800 cuts. The bank treats Challenger's AI-attribution share as a lagging indicator against faster erosion visible in raw labour-market data.

European Commission

Brussels deferred the Digital Omnibus's Annex III employment-compliance deadline from 2 August 2026 to December 2027, even as California advanced three binding AI-hiring bills the same week. The 17-month delay leaves EU workers without the algorithmic-hiring safeguards the regulation already promises.