French technology powerhouse Capgemini has announced the sale of its U.S. subsidiary, Capgemini Government Solutions (CGS), in a move that reflects growing global pressures on how tech companies align with ethical expectations and navigate regulatory challenges. The decision, revealed in early February 2026, follows intense scrutiny around a government contract that drew criticism in both Europe and the United States.
Capgemini, one of Europe’s largest IT services and consulting firms, disclosed that the divestiture of CGS — which accounts for just a fraction of its global revenue — will be initiated immediately. The subsidiary had been engaged in contracts with U.S. Immigration and Customs Enforcement (ICE), providing services tied to tracking and locating individuals, a collaboration that sparked public backlash and political debate in France and abroad. Capgemini’s leadership concluded that U.S. legal restrictions prevented the firm from maintaining sufficient oversight of the subsidiary’s activities to ensure they aligned with its corporate values and objectives.
The controversy intensified amid broader global reactions to U.S. immigration enforcement policies, including protests in major cities and criticism from human rights organizations. Lawmakers in France, trade unions, and advocacy groups said Capgemini needed to clarify its role in assisting ICE operations amid accusations of human rights violations linked to enforcement actions. Under mounting pressure, executives acknowledged they were unaware of certain aspects of the subsidiary’s contracts and opted to pursue divestment to protect the company’s reputation and ethical stance.
The CGS unit represents only around 0.4% of Capgemini’s projected 2025 revenue, highlighting that the decision is less about short-term financial impact and more about preserving long-term brand integrity and global stakeholder trust. Capgemini’s shares experienced a positive reaction in the market following the announcement, rising as investors took the divestment as a sign of proactive risk management and responsiveness to social concerns.
Industry analysts see Capgemini’s move as part of a broader trend where major technology firms are increasingly held accountable for their role in government contracts and their social implications. In recent years, public expectations around tech ethics have intensified, prompting firms to reassess partnerships that may expose them to reputational risk or conflict with core business values. This is especially relevant as companies expand into sensitive areas such as surveillance, defense, and public sector services.
The sale of Capgemini Government Solutions also fits into a larger pattern of corporate restructuring and consolidation in the global tech sector. Across industries, firms are realigning their portfolios to prioritize high-growth areas such as artificial intelligence, cloud services and digital transformation while shedding units that may not fit strategic priorities or ethical standards. For example, Accenture recently announced plans to acquire the U.K. AI services provider Faculty to strengthen its AI capabilities, underscoring how companies are doubling down on transformative technologies even as they divest unrelated units.
Critics of the divestment still argue that it doesn’t fully resolve concerns about corporate participation in sensitive government operations, urging Capgemini and others to adopt clearer policies on what types of contracts they will engage in moving forward. Human rights advocates emphasize that transparency about past contracts and commitments to ethical guidelines are essential as the technology industry grows ever more intertwined with government functions around the world.
Capgemini’s decision will likely influence peers and competitors as they evaluate their own exposure to controversial sectors or partnerships. It may set a precedent for how large consultancies and tech integrators handle ethically charged engagements, especially amid rising public scrutiny and calls for corporate accountability.
For now, CGS’s divestiture signals a strategic shift for Capgemini — one that prioritizes reputation and compliance over marginal revenue streams. As the sale progresses, stakeholders inside and outside the company will be watching closely to see how this move affects global partnerships, market positioning and the broader conversation about ethics in tech operations.
