Wipro's Turnaround Story Is At Risk Of An About-Turn

What gives?

On the face of it, the turnaround promised by Indian IT's first non-Indian CEO seems to have run its course. Yet, two business restructurings in less than three years has prompted a spate of senior-level exits. That has prompted questions if decisions were ill-timed at the company that has seen four chief executive officers in the past decade and a half, according to multiple former Wipro executives BQ Prime spoke with.

And Delaporte is only getting started with the task at hand—transformation by way of tough decisions and acquisitions to fill the gaps in the business. Except, these have yet to deliver accelerated growth.

Delaporte took the helm of the Bengaluru-based IT services firm in July 2020, when a raging pandemic stalled all but essential activity in one of the world’s strictest covid lockdowns. Globally, companies scurried to move operations to the cloud to enable remote work for employees. Business, naturally, boomed for India’s IT services firms, as they drove digital transformation at scale for clients big and small.

Then, Wipro’s Paris-based CEO, who hadn’t been to India yet, announced the first business realignment in November 2020—less than six months into his tenure.

That was a "mistake"—a case of too much, too soon, a person who has worked closely with Delaporte said on the condition of anonymity, as he has moved on from the company. Delaporte reduced number of people reporting directly to him to just four, compared to his predecessor Abidali Neemuchwala.

Whatever he did was correct—the consolidation of P&Ls—but the timing was off, according to the person quoted above. This was a big realignment and should not have happened this early, the person said.

Effective Jan. 1, 2021, Wipro reorganised its seven strategic business units, service lines and nine business geographies into four strategic market units and two global business lines. The strategic market units were organised by geography and global business lines by capabilities. While the strategic market units own the P&Ls, delivery and practice were aligned with global business lines.

The four strategic market units were:

• Americas 1, which included healthcare and medical devices; consumer goods and life sciences; retail, transportation and services; communications, media and information services; products and platforms; and Latin America. Srini Pallia, a Wipro veteran of more than 31 years, was put in charge as CEO.

• Americas 2, which included key client Citibank, BFSI, manufacturing, hi-tech, energy and utilities, and Canadian operations. Angan Guha, a Wipro veteran of 29 years, was put in charge as CEO.

• Europe consisted of six regions—the U.K. and Ireland, Switzerland, Germany, Benelux, Nordics and Southern Europe—and was responsible for all operations. Pierre Bruno, who was formerly with Dell Inc. and DCX Technology, was put in charge as CEO.  

• Asia-Pacific, Middle East and Africa, or APMEA, included six regions—Australia and New Zealand, Middle East, Southeast Asia, Japan and Africa—and was responsible for all operations. SN Bala, a Wipro veteran of 19 years, was put in charge as CEO.

The four leaders reported to Delaporte directly. Guha and Bala, however, have moved on since then to become CEO of Birlasoft Ltd. and join the board of Denver, U.S.-based consultancy Startek, respectively. Suzanne Dann of IBM Corp. and Anis Chenchah replaced them in the roles.

Among global business lines, the first was called Wipro iDEAS (Integrated Digital, Engineering and Application Services) and included service lines of domain and consulting, applications and data, engineering R&D and Wipro Digital. The second was called Wipro iCORE, which included cloud infrastructure, digital operations, and cybersecurity services.

Wipro Digital President Rajan Kohli was picked to lead Wipro iDEAS. He left in April 2023 to become CEO of CitiusTech. President Nagendra Bandaru, who took charge of Wipro iCORE, is still at Wipro in an expanded role.

“It is a leaner model… We’ve reduced the number of P&Ls from something like 26 down to four, adding up at my level, four,” Delaporte said during an analyst call after the company’s Q3 FY21 earnings on Jan. 13, 2021. “So, that means a lot less walls inside the organisation, a lot less silos and a lot more opportunity for people to work together.”

"The new model seeks to achieve just this. Besides ensuring adequate sector and domain focus in our go-to market and execution, the new operating model will help us drive the growth in the non-U.S. markets," Delaporte said.

But that resulted in an exodus.

According to a TOI report dated Jan. 29, 2021, the overhaul resulted in the exits of at least 75 senior vice presidents and vice presidents, and 300 general managers as of that day. Wipro had more than 200 senior vice presidents and vice presidents at the time.

To be sure, this was during the pandemic when the 'Great Resignation' churned the technology industry for want of talent.

Still, Delaporte went for a second round of restructuring earlier this year, but this time he doubled the number of global business lines to four.

• Wipro FullStride Cloud brings together the firm's entire suite of cloud capabilities under a fully integrated, full-stack offering. Jo Debecker, who headed Wipro's cloud vertical, leads this business and assumes the title of global head of Wipro FullStride.

• Wipro Enterprise Futuring offers clients distinctly forward-looking solutions for large-scale enterprise transformation. Nagendra Bandaru, the head of Wipro’s iCORE business, became the global head of Wipro Enterprise Futuring.

• Wipro Engineering Edge, launched in 2022 to advance the firm's position as a global engineering services leader, has become a standalone business. Harmeet Chauhan, who led Wipro Engineering, became the global head of Wipro Engineering Edge.

• Wipro Consulting aligns Capco, Designit, and Wipro's domain and consulting business under one banner. Capco CEO Lance Levy and Philippe Dintrans, global head of Wipro Domain and Consulting, continue to lead their businesses under Delaporte. Designit CEO Nicolas Parmaksizian has joined them as well.

The changes came into effect on April 1, amid another exodus.

Over the past one year, at least 14 senior vice presidents and presidents have exited the Bengaluru-based IT services firm. These include:

• Mohd. Haque, head of healthcare and medical devices.

• Ashish Saxena, head of manufacturing and hitech.

• Gurvinder Singh Sahni, vice president.

• Douglas Silva, Wipro's Brazil head.

• Tomoaki Takeuchi, Wipro's Japan head.

• Sarah Adam Gedge, Wipro's ANZ MD.

• Mohammed Areff, Wipro's Middle East MD.

• Angan Guha, Wipro Americas 2 CEO.

• Sanjeev Singh, chief operating officer.

• Satya Easwaran, Wipro India head.

• Rajan Kohli, Wipro iDEAS head.

• Kamini Shah, Wipro Americas 1 CFO.

To be sure, the latest exits aren't because of Delaporte's working style, but non-performance, the first person cited earlier said. About half of those who have left the company recently were let go as they couldn't deliver, this person said. These include even those who Delaporte had brought from outside, but they couldn’t perform, the person said.

Yet, the senior leadership is "spooked", especially after Haque's and Saxena's exits, a second person said on the condition of anonymity.

There's fear that they are only as good as their last quarter, the second person, who has since moved on from the company, said. Wipro needs to instill confidence in them so that they stay invested in the company for the long run, this person said.

"Wipro is undergoing one of the largest transformations seen in the industry with the goal of driving long-term growth and competitive edge," a spokesperson for the company said in response to BQ Prime's queries. "The company’s 45% growth over the past 2.5 years—from $8 billion to $11 billion in revenue—and the significant increase in large accounts—from 11 to 20—are indications that the strategy is working."

To Wipro's credit, the company has continued to add leaders to the top rung. Earlier this year, the IT services firm promoted 12 senior executives to the post of senior vice president, while 61 executives were elevated to the rank of vice president. These promotions were a recognition of their performance and potential, the company had said then.

As on March 31, 2023, Wipro had an attrition rate of 19.2% on a trailing 12-month basis and an overall headcount of 256,921 employees. That, when Delaporte took charge, stood at 13% and 181,804 employees, respectively, as of June 30, 2020. The current attrition rates compares with that of TCS at 20.1% and Infosys 20.9%.

According to the second person, the restructuring was timed well, in the sense that there's no point in prolonging a realignment that's aimed at making the company agile. The restructuring was also a consequence—a natural fallout—of the acquisition overdrive brought on by Delaporte.