India is a fast-growing market for French IT services major Capgemini and a solid base for it to service clients globally, Capgemini global CEO Aiman Ezzat told ET. The company has more than half of its 360,000 employee base in India. In an interview with Romita Majumdar, the chief of the $23-billion IT company, during his ongoing India visit, said that he is hopeful of the demand situation improving over the next two-to-four quarters but is waiting for an inflection point. Ezzat added that generative AI's impact on productivity gains will be much higher than pricing gains in the long run. excerpts:
How do you see technology spending in the current macroeconomic situation?
It is pretty mixed at present. There is softness in some places but not everything is doomed. The reality is that our pipelines are huge and that shows the appetite for technology and transformation. Europe has been more resilient. There is a bit more softness in the US. We have been preparing for this scenario since the end of last year and we anticipated the deceleration. The sectors facing the biggest rationalization are tech, telecom and financial services which are big for us in the US. We can see plenty of positive signs but what I'm looking for is an inflection point because that will really be the real restoration (of demand).
Capgemini has gone slow on hiring over the past year. When will hiring be back on track for laterals as well as freshers?
In the last few years, we had to deal with high attrition and high growth. For that we had to buffer because if you end up having 30% attrition in a year you cannot replace people overnight. And India is one of the countries where we have the highest attrition and potentially the highest growth at the same time. Now, when things get optimised, you see less growth and attrition comes down, you don't need to operate with these buffers (of people). So we are in the optimization phase. I'm not the only one, the whole industry is doing that. But it's not a sign that the business is declining, it is just that we're able to optimize right now. So of course, we'll be onboarding less freshers, in the short term, but this can change in two or three quarters.
India is a huge talent hub for Capgemini, but how is India as a market?
People are coming to India, not just for cost. It's (for) access to talent. They realised that without having a base in India, they're missing part of the talent pool. So I see this trend will continue and it's just more the realisation that they need to have a footprint in India, because technology has become so important to them.
By Romita Majumdar
https://economictimes.indiatimes.com/epaper/delhicapital/2023/sep/15/et-efm/people-come-to-india-for-its-talent-not-to-cut-their-costs/articleshow/103673375.cms
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