Majority of Capgemini's 2 billion euros investment in AI coming to India

A bulk of the Paris-headquartered IT major Capgemini’s proposed Euro 2 billion investment over three years in artificial intelligence (AI) is coming to India, a top official of the company said here on Wednesday. The three areas where the European tech major is investing are talent acquisitions, talent reskilling and for partnerships and creating a centre of excellence (CoE).

“We have announced we will be training 100,000 people by the first half of 2024. A larger part of the investment will be on people. Today we have 30,000 people who are in our AI and analytics teams. We believe this practice will double in three years,” said Ashwin Yardi, CEO, Capgemini India.

When asked how much of this will be invested in India, Yardi added that over 50 per cent of Capgemini’s capabilities are in India.

“Anything we do at a group level usually is disproportionately done out of India. Even for our KPIs…it’s driven from India,” he told Business Standard on the sideline of Nasscom Technology Leadership Forum.

The other big focus of the investment for the firm is partnership and setting up CoEs. India has always been the centre point for the firm when it comes to CoEs. At present the firm has over 100 CoEs in India.

“The CoE framework is to ideate, incubate and scale. Some scale up and become full-scale CoEs. We do have GenAI CoE out of India as well. We also announced the development of our GenAI platform called rAise and it is being built and developed by the team in India,” added Yardi. More than 50 per cent of Capgemini’s AI talent is in India.

The setting up of CoEs is a global strategy and the firm has identified 10 priority industries and each of these CoEs is in India.

“Some of these CoEs are global but then there are many other CoEs, which are both horizontal and vertical. These are technology, client-specific CoEs, domain CoEs…at present we have over 100 CoEs in India. Some of these are different in size depending on their impact on the revenue,” added Yardi.

For FY24, the company has guided for revenue growth guidance of zero to 3 per cent, slower than the 4.4 per cent growth in 2023. While these numbers continue to show the impact of global uncertainty, the top management of the company has shown good traction in tapping into generative AI (GenAI)-led deals.

“We are working on 300 projects on the GenAI front. These are actual projects that have moved out of the labs or PoC level and are actually scaling. We have also said that our active deal pipeline on GenAI is at 800,” said Yardi.

Like its other competitors in the sector, Capgemini has also seen its headcount fall. The onshore workforce decreased slightly to 145,800 employees, down by 2 per cent year on year, while the offshore workforce slumped by 7 per cent to 194,600 employees, which is 57 per cent of the total headcount. The India headcount stands at 175,000.

Yardi explains that one of the reasons for the fall was the over-hiring that happened in the preceding years.

“Last year we over-hired and hence we focused on optimising our headcount. This year, we are at an optimal level and if we have to grow at the guidance level, we should hire,” said Yardi.

Although the company has started visiting campuses, the company is yet to decide the actual number of people to be hired this year. Last year, Capgemini hired 30,000 both from campuses and lateral.

About the demand environment, Yardi said: “It is not that people are not spending. Last year there were a lot of unplanned ramp downs. Since January, we have not seen any sudden unplanned impact”.