Tech Mahindra is actively pursuing partnerships with Global Capability Centers (GCCs) as part of its strategy to enhance operating margins and align revenue growth with industry standards. This initiative is part of a three-year plan known as Project Fortius, which aims to eliminate underperforming accounts. Currently, Tech Mahindra is in discussions to establish a GCC in Hyderabad for Goodyear Tire & Rubber Co., based in Ohio. This center is expected to employ around 3,000 individuals and will focus on the research and development (R&D) and IT operations for the American company.
GCCs serve as in-house technology hubs for major Fortune 500 firms, which have traditionally relied on Indian IT outsourcing services. Rather than outsourcing their tech needs, these companies hire employees to manage operations internally. Tech Mahindra, like other Indian IT service providers, facilitates the establishment of GCCs by supplying personnel and managing the centers. These GCCs may compensate IT service providers either for the employees they supply or through a revenue-sharing model.
The push towards GCCs has been attributed to Tech Mahindra’s new CEO, Mohit Joshi, who took over from C.P. Gurnani in December 2023. Under Joshi’s leadership, there has been a renewed focus on engaging with GCCs more rigorously. Tech Mahindra, which reported $6.3 billion in revenue for FY24, plans to allocate approximately 2% of its workforce, totaling 150,488 employees, to operate the Goodyear GCC. Goodyear itself reported $20 billion in revenue by the end of December 2023.
Typically, IT service providers transition GCC operations back to the parent company after a few years, although the specific plans for Tech Mahindra and Goodyear remain unclear. Experts indicate that employees assigned to a GCC have two options once the operational period concludes: they can either return to the IT service provider or transition to the parent company managing the GCC.
