In Srinivas Pallia, Wipro Gets An Insider In The Corner Office
Wipro has appointed Srinivas Pallia, a company veteran of 32 years, as its new CEO after Frenchman Thierry Delaporte resigned from the post before completion of his five-year tenure.
In Srinivas Pallia, Wipro Ltd. has appointed its first internal chief executive officer since 2016 to bring order to the chaos left in the wake of an exiting Frenchman.
“While several external candidates were mooted, (Chairman) Rishad Premji has opted for an internal candidate based in New Jersey—the heartland of IT services decision-making,” Phil Fersht, chief executive officer and chief analyst at the US-based research consultancy HfS Research, said in a blog on April 6. “Srini has the respect of the guys who built the firm (and are still there) and well-liked by key partners Microsoft and SAP.”
Thierry Delaporte, who took the helm of India’s fourth largest IT services firm in the early days of the pandemic, has resigned “to pursue passions outside the workplace”, according to an exchange filing on Saturday. He will stay on till May 31 to ensure a smooth transition. His tenure was to end in July 2025.
At once, Wipro has gained a CEO who is aware of the machinations of the company that Azim Premji built and has witnessed the fallout of the restructurings that Delaporte effected. A veteran of 32 years at the company, Pallia in his latest role was CEO of Wipro Americas 1—a creation of his predecessor that became the fastest growing “strategic market unit” under him.
That, when all other geographies—Americas 2, Europe, and Asia Pacific, Middle East and Africa—have shrunk in business. Essentially, Pallia did the heavy-lifting for Wipro in an uncertain demand environment that gripped India’s $250-billion IT services industry in the aftermath of the pandemic.
Now, the company is actually staring at a revenue decline in FY24.
But that’s just one of the broken pieces of Wipro that Pallia has to mend. First, he has to restore the morale of a company that has seen a senior-level exodus due to the large-scale business restructurings brought on by Delaporte.
“Simply put, the firm is bleeding talent, and morale has never been lower,” Fersht said in the blog. “He (Pallia) has to nail down his plans quickly, give the firm renewed direction, and convince key stakeholders he is the right choice during perhaps the darkest period in Wipro’s history.”
The next task at hand would be to retain talent.
Delaporte, in a little over three years, lost at least 25 senior vice presidents—including BFSI head Angan Guha and digital business head Rajan Kohli—and over 200 general managers due to the restructurings. Things came to a head when, in September last year, Wipro’s long-time Chief Financial Officer Jatin Dalal resigned.
“Significant talent, such as Subha Tatavarti, Suzanne Dann, Nagendra Bandaru, and Jo Debecker, remains at the company,” Fersht said. “He needs to pull together and ensure their stay.”
Then, there’s the matter of bringing back lost growth, which is easier said than done.
As an insider, Pallia would have a headstart, but in the near-term, it will be the external demand conditions that will dictate how quickly Wipro returns to its peer-level growth.
The consulting business will still be a drag as discretionary deals are still largely absent. The $1.45-billion Capco deal—Delaporte’s attempt at doing an Accenture in Indian IT—has not borne fruit yet.
“The test for Srini Pallia would be how Wipro measures up against peers when demand normalises,” Girish Pai and Suket Kothari, research analysts at Mumbai-based brokerage Nirmal Bang, said in an April 7 note. “He needs to put in the blocks now, to see that Wipro starts running fast as soon as the demand picks up. We think both investors and promoters will give him three years to deliver, though his tenure is set at five years.”
In a LinkedIn post, Pallia acknowledged the transformation by way of tough decisions that was brought on Delaporte, one that has “allowed us to optimise our structure, enhance our leadership, and improve our overall efficiency”.
“I’m honoured and humbled to assume the role of CEO at Wipro—a company where I built my entire career,” Pallia said. He had joined the company right after his post-graduation from Indian Institute of Sciences, Bengaluru, in 1992.
“There’s a lot of work still to be done ahead of us,” he went on to say. “I look forward to working with all our 240,000 Wiproites around the globe and taking this iconic company to its next phase of growth.”
On Monday, Wipro shares fell 1.09% to Rs 479.90 apiece on the BSE even as the benchmark Sensex ended the day 0.67% higher at 74,742.50 points.