Wipro is in a state of crisis: Here's why
India's fourth-largest software services firm, Wipro, faces weak growth, declining headcount, and subdued numbers for the third consecutive quarter. On September 21, the company announced the resignation of CFO Jatin Dalal. This raised concerns about Wipro's turnaround struggle under CEO Thierry Delaporte and caused disquiet among analysts and company trackers. The company has now appointed Aparna C. Iyer as its new CFO, effective immediately.
High attrition rate plagues Wipro's leadership
Wipro's senior management attrition is a concern. Dalal's departure is the ninth top-deck exit this year and the fourteenth since September 2022. As Wipro's performance continues to lag behind peers, questions loom over whether Delaporte will secure a second term when his initial five-year tenure ends in July 2025. The company has witnessed a steady stream of exits since Delaporte's appointment, and concerns persist about whether newer entrants understand the business well enough.
Wipro's ongoing challenges
Wipro has been grappling with revenue growth challenges since Q4 FY22, and its Q2 revenue growth guidance of -2% to 1% in constant currency does little to inspire confidence. Margin pressure remains a concern, with margins only slightly above its peers. Wipro faces difficulties in vendor consolidation and struggles in its turnaround efforts.
Wipro's response to leadership attrition
Wipro has publicly downplayed concerns about leadership attrition, emphasizing its leadership bench strength. Chairman Rishad Premji expressed full support for Delaporte during the company's annual general meeting. The company maintains that it has the necessary leadership infusion and strength to overcome challenges.
Analysts surprised, divided on Dalal's departure
Dalal's exit timing raised eyebrows, with some analysts calling it a knee-jerk reaction. Everest Group CEO Peter Bendor-Samuel called it a significant surprise and noted that it comes at a challenging time for Wipro, already under market pressure. Meanwhile, Phil Fersht from Horses for Sources highlighted the excitement around Iyer taking over as CFO, emphasizing the need for more women in leadership roles in the tech industry.
