HCLTech joins Indian IT firms losing Google work amid vendor consolidation

When Marc Berson took the helm of Google's Internal Systems division in February of last year, he inherited a sprawling vendor ecosystem. What he did next would ripple through India's IT services industry: a systematic consolidation of the contractors and service providers Google relied on to keep its internal operations running. HCLTech, one of India's largest IT services firms, found itself on the losing end of that reorganization. The company joined a growing list of Indian IT providers watching their Google revenue shrink as the search giant tightened its vendor roster.

The consolidation reflects a broader shift in how major technology companies manage their service provider relationships. Rather than spreading work across dozens of vendors, Google—under Berson's direction—has been rationalizing its supplier base, keeping fewer partners but potentially deepening relationships with those who remain. For HCLTech and its peers, the math is straightforward and unforgiving: fewer vendors means fewer opportunities, and in an industry where client concentration already poses risks, losing a major account stings.

But the pressure on Indian IT firms extends beyond Google's internal housekeeping. Across the sector, large clients are consolidating vendors for reasons that go beyond streamlining. Automation tools and artificial intelligence are doing work that once required armies of engineers. Companies that once needed hundreds of hands on deck for routine system maintenance now need far fewer. The traditional IT services model—where you staff up a team, bill by the hour, and scale with client demand—is under structural stress. When a client can automate a process, they don't need the vendor anymore.

HCLTech is hardly alone in feeling this squeeze. The Indian IT services industry, built on the foundation of providing cost-effective technical labor to Western corporations, faces a reckoning. The firms that thrived in the 1990s and 2000s by offering cheaper alternatives to onshore development are now competing in a world where the alternative to hiring people is not hiring people at all—it's deploying software that doesn't sleep, doesn't take vacation, and doesn't require benefits.

For HCLTech specifically, the Google situation is a concrete example of a trend that keeps executives in Bengaluru and Noida awake at night. The company has been investing in automation capabilities and artificial intelligence services, trying to position itself as more than a body-shop for coding and infrastructure work. But pivoting an entire business model takes time, and in the meantime, revenue from legacy clients is evaporating. The question facing HCLTech and companies like it is whether they can reinvent themselves faster than their clients can automate away the need for them.

Google's vendor consolidation under Berson is not an isolated incident. It's a signal of where the industry is heading. As automation becomes cheaper and more capable, the economics of outsourcing routine IT work to India become less compelling. The firms that survive will be those that can offer specialized expertise, manage complex transformations, or build proprietary solutions—not those that simply provide labor at scale. For now, HCLTech and its competitors are caught in the transition, watching their traditional revenue streams narrow while racing to build new ones.