Israel-Hamas war – Global technology companies with offices in Israel may relocate their operations to India or other regions if the Israel-Hamas conflict grows, according to industry analysts. TCS and Wipro, for example, might activate business contingency plans and relocate operations to India, they added.
Over 500 international corporations, including Intel, Microsoft, and Google, maintain offices in Israel, some of which are global competence centers (GCCs) and research and development (R&D).
If necessary, they may relocate operations to places with similar time zones and personnel skills as part of a business continuity strategy, according to experts. Apart from India, these companies may consider destinations such as the Middle East or Eastern Europe.
“Workloads will shift in the short run to offset risk… India and Eastern Europe would benefit if there is a material impact,” he said.
Bendor-Samuel, on the other hand, stated that the nature of the talent in Israel is “very specialized,” and that a permanent move of tech operations from there is improbable at this time.
Israel-Hamas war: Tech firms may shift ops to India, but it is important to note that Israel is a critical hub for security, research and development, and automotive innovation.
Following Hamas’s surprise strike on Israel over the weekend, Tel Aviv declared war and stated that it could call up to 300,000 reservists from its citizenry to assist in military operations if necessary. Many of these folks work in the technology sector.
“The strategic importance of the region from the cybersecurity perspective as well as the recent surge in attacks has led to clients requesting more security (for their cybersecurity infrastructure,” said N G Subramaniam, chief operating officer of TCS.
Customers around the world have recently demanded to tighten their cybersecurity infrastructure, he said on the sidelines of the company’s Q2 earnings.
According to Pareekh Jain, an outsourcing expert, if the unrest intensifies and reaches technology hubs, “companies may have to relocate their delivery centers and GCCs to other locations.”
“Israel is a major hub for cybersecurity solutions for major technology companies and any escalation of the safety situation could lead companies to shift these roles out for business continuity,” he said. “Apart from places in the US and Europe, India is the other country that provides enough scale for such work.”
Furthermore, additional escalation could disrupt the region’s supply chain, affecting the IT services company and consequently revenues, according to Jain. According to him, the majority of the work done by Israel’s IT services sector is part of highly particular local projects, primarily for the government.
Sundar Pichai, CEO of Google, tweeted on Tuesday that the business has approximately 2,000 employees in Israel spread over two offices. “Our immediate focus has been on employee safety since Saturday.” “We’ve contacted all of our local employees and will continue to support them,” he wrote on the microblogging platform X.
TCS has an estimated 250 employees in Israel, the majority of whom are locals, whilst Wipro employs about 80 employees, all of whom are Israeli nationals.
TCS’s chief operating officer and executive director, N Ganapathy Subramaniam, stated that the business is “monitoring the situation” and working to assure staff safety.
Wipro stated that all of its employees have been located and that they have been instructed to work from home until further notice.
“We are monitoring the situation closely and are ready to activate business continuity plans should there be a further escalation of events,” a Wipro spokesperson said.
Aside from TCS and Wipro, other companies with operations in the region include Infosys, HCLTech, and Tech Mahindra.
Until Wednesday afternoon, the corporations had not responded to emailed inquiries.
“Indian IT firms have miniscule exposure to the country – less than 1% of their revenue base,” a senior analyst said on condition of anonymity. “So, from a business perspective, there is not going to be a major impact. However, if it escalates geopolitically, by which I mean that other Middle Eastern countries get involved, it could have ramifications in the overall business,” the person said.