JC Penney may cut outsourcing to India; plans insourcing instead

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26 Aug, 2025 12:21

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Moneycontrol BureauJC Penney Co. Inc, the US-based retail giant, is planning to cut back on its outsourcing expenses to India. The retailer’s announcement comes as a hard rap on the knuckles of Indian IT industry, which was already reeling under global gloom in the sector. Each year the retailer used to dole out software contracts worth millions of dollars to firms in India like Tata Consultancy Services (TCS), Infosys, to name a few.The department store chain, in its drive to cut costs and tap the local talent pool, is planning to hire 1,000 techies over a period of next two years. The move comes on back of the company’s broader plans to 'insource' and is taken in order to keep its competitive edge intact against online rivals such Amazon.com etc. The company had recently launched its office in Bengaluru and houses more than 100 engineers at the technology facility.With this swing towards insourcing, it is apparent that enterprise buyers of technology in the west is shifting their attitude towards India which used to be viewed as a low-cost outsourcing destination.In the past CIOs of large companies like General Electric Co (GE) and Citigroup Inc, to name a few, would visit India with the sole purpose of meeting up their vendor tech companies such as Infosys and Tata Consultancy Services (TCS) to outsource and handover low-cost contracts to them. However, these days Fortune 500 companies pay visit to India to tap robust start-up environment and to take advantage of the tremendous growth opportunities it has to offer.Recently, India has witnessed large retailers from US like the Lowes Companies Inc. and JC Penney are making grand plans to set up technology offices in India which will act as their extensions in India. These outposts are intended to insource work back from the Indian IT firms.