Company: G
Filing Date: 2025-03-03
Form Type: 10-K
Source: 0001398659-25-000035
Chunk: 49

Company: Genpact LTD
Filing Date: 2025-03-03
Form: 10-K
Item: Item 1A
Chunk 49
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 profitability.

Increased competition may result in lower prices and volumes, higher costs, and lower profitability. Any inability to compete effectively, including as a result of any of the factors described above, would adversely affect our business, results of operations and financial condition. 

25

Wage increases in the countries where we operate may reduce our profit margin. 

Salaries and related benefits of our employees are our most significant costs. Demand and competition for skilled employees, especially employees with the mix of skills and experience that we need to provide certain of our services, including highly skilled technical personnel and personnel with AI skills, continue to be high. As wage levels for skilled employees increase in most of the countries in which we operate because of, among other reasons, inflation and tight labor markets for employees with particular skills, wage increases have adversely affected our profitability in the past and may continue to adversely affect our profitability in the future to the extent that we are not able to control or share wage increases with our clients.  Sharing wage increases may also cause our clients to be less willing to utilize our services. We will attempt to control such costs by seeking to add capacity in locations where we consider wage levels of skilled personnel to be satisfactory, but we may not be successful in doing so. In recent years we have had to increase our wage levels for certain roles significantly in a short period of time, and we may in the future need to increase our wage levels significantly and rapidly in order to attract the quantity and quality of employees that are necessary for us to remain competitive, which may have a material adverse effect on our business, results of operations and financial condition. 

We engage independent contractors in various U.S. states in the ordinary course of business. Several U.S. states have enacted legislation that requires businesses to consider individuals to be employees who, under current law in most other U.S. states, would be considered independent contractors. If additional states or the U.S. federal government pass similar legislation, we may be required to modify our hiring plans and associated business model, which may increase our cost of doing business.

In addition, in early 2019, the Supreme Court of India clarified that certain allowances paid by an employer to an employee should be included for purposes of calculating provident fund contributions in addition to contributions based on basic wages alone. If this decision is implemented with retrospective application, the amount of the payments that we are required to make at that time to or for the benefit of our employees could be substantial and could have a material adverse effect on our business, results of operations and