Capgemini increases Indian staff by 20%, as profits rise by 31%

Capgemini increased the number of staff it has in India by 20% in 2014, while its profits went up by 31% and its revenues by 3.4%

Capgemini increased the number of staff it has in India by 20% in 2014, while its profits went up by 31% and its revenues grew by 3.4%.

The IT services provider now has more than 56,000 staff in India, representing 47% of its total workforce. 

Capgemini India CEO Aruna Jayanthi recently said the company was on track to reach its goal of employing 70,000 people in India by 2016. It has more than 67,000 staff in offshore locations, which is part of its rightshoring strategy, where it delivers from a mixture of locations.

Globally, the company recruited about 40,000 new employees in 2014, with about 40% of them young graduates.

The French firm also announced a sales increase of 3.4% in 2014, with modern technologies such as cloud, mobile, social and analytics contributing to the €10.57bn total.

Sales in the UK increased by just over 4%, which the company said was driven by application and other managed services, accounting for 55.4% and 25.5% of total sales respectively.

Group profits increased by 31% compared with the previous year, reaching €580m.

CEO Paul Hermelin said innovation and industrialised IT services helped the company exceed its expectation.

Peter Schumacher, CEO at management consultancy the Value Leadership Group, which focuses on offshore services, said Capgemini has come a long way in India. 

“In just 10 years its employee base in India has grown 25-fold to more than 50,000,” he said.

But Schumacher added that increasing the number of offshore staff is not a guaranteed recipe for success.

“Capgemini still needs to figure out how to leverage its evolving delivery model to achieve higher organic growth rates and superior performance," he said. 

"Improving delivery quality is an important lever, but even more importantly Capgemini must develop advantages, rather than just eliminate disadvantages.”

The company expects sales to increase at a rate of between 3% and 5% in 2016.

But in the UK there could be a drop in revenues in 2017 as a massive IT services contract between the government and Capgemini is broken up.

HM Revenue & Customs (HMRC) is planning to end its mega IT outsourcing contract with Capgemini, known as Aspire, in 2017. The Public and Commercial Services Union has about 800 members at Capgemini and many of them work at HMRC.

Aspire is one of the biggest IT outsourcing deals ever signed by the UK government, costing on average £813m per year over the past 10 years, according to the National Audit Office. By the time the deal ends in June 2017, prime contractor Capgemini will have received £10.4bn of taxpayers’ money.

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