Wipro changes top management, after slow growth

The company’s revenue from IT services grew slower than for its Indian competitors

Wipro will replace the joint CEOs of its IT business with a single chief executive, the company said Friday after reporting lackluster results.

Wipro, India’s third largest outsourcer, reported seemingly strong year-on-year growth in IT services revenue of 19.3 percent for the quarter ended Dec. 31. The rise to US$1.34 billion reflects an overall pickup in business for large Indian outsourcers. Wipro reports results in accordance with International Financial Reporting Standards (IFRS).

But that growth, while strong, was lower than that achieved by India's top two outsourcers: Tata Consultancy Services, and Infosys Technologies.

Wipro’s growth in the last several years has been a mix of both organic growth and through acquisitions, said Jimit Arora, research director at Everest. “In 2010 the company has not made significant acquisitions,” he added.

The company said its operating margins were flat, as there were fewer working days, and lower staff utilization in the quarter. Wipro, which has other businesses, including in lighting and consumer care, does not break out a net profit figure for its IT services business.

Girish Paranjpe and Suresh Vaswani, the current joint CEOs of Wipro’s IT business will be replaced from Feb 1 by a single CEO, T K Kurien who was formerly head of a new green technology business at Wipro.

The joint CEO structure was one of the key factors that successfully helped the company navigate the worst economic crisis in our time, Wipro said. With the change in environment, there is a need for a simpler organization structure, it added.

Indian outsourcers are seeing an improvement in business from clients in the U.S. and Europe, but there is still uncertainty. It is still early to say that the outsourcing industry has returned to long term growth, said Siddharth Pai, a partner at TPI, a sourcing data and advisory firm.

Increased hiring in India has helped push up costs and increase staff attrition. Wipro added 3,591 people in the quarter, taking the total staff as of Dec. 31 to 119,491. An appreciating rupee is also reducing the funds available to Indian outsourcers to run their operations in the country, thus impacting margins.

Wipro added 36 new clients in the quarter.

Join the newsletter!

Or
Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags outsourcingbusiness issuesservicesfinancial resultsoffshoringwiproInfosys TechnologiesTata Consultancy Services

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service
Show Comments

Essentials

Mobile

Exec

Budget

Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?