IT captives see project delays amid lockdown

Bengaluru: India technology captives or global in-house centres (GICs) see projects delayed as the country imposes lockdown to stem the spread of coronavirus (Covid-19), said analysts.

Technology captives of global organisations in India have gained prominence over the years and started developing crucial software for their parent organisations. India currently houses more than 1,200 such GICs and majority of them are focused on technology development.

While some of the captive centres see a sharp fall in productivity as a majority of the employees have started working from home; some captives focused on the travel industry are suggesting employees to take unpaid leave for months. “GICs have faced challenges in finishing some existing projects. Their parent companies are holding back on the discretionary spend. The ongoing lockdown in the country will hit productivity,” said Pareekh Jain, founder, Pareekh Consulting.

The GICs, however, are continuing some of the critical development work, added Jain.

Captives of banking and financial services sector has seen productivity hit due to lockdown in India, said Jain. “Sabre, a travel industry focused tech services company, suggested some employees can opt for three-month unpaid leave without assuring if they (will) get the same role or project after that leave period,” a person privy to the matter told ET. Sabre did not respond to ET’s queries before press time.

A set of analysts believe that captives are well placed to mitigate this crisis compared with the IT services companies, but they could see hiring freeze for some time going forward. “We haven’t reached a stage yet where we can see layoffs. These captives or these technology capacity centres over invested in robust business continuity infrastructure and allowed employees to work from home,” said Lalit Ahuja, founder, ANSR, which facilitates opening of captives of global companies in India.

Ahuja said these captives would obviously want to do things in a cost-effective manner considering the global economic slowdown and at “worst (there) could be hiring freeze” in some centres. Some captives are also proactively making plans to get back to growth once the Covid-19 pandemic situation improves, said Ahuja. At the same time captive centre of Telstra, Australian telecom major, has seen more work coming to India facilities as their Philippines units are shut amid Corona virus outbreak, said analysts. “Telstra has a well-established business resilience programme to provide effective response and recovery capabilities in the event of any disruption to our business operations,” said NT Arunkumar, India Delivery & Innovation Executive for Telstra.

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