Wipro’s Chief Executive Officer and Managing Director Thierry Delaporte has resigned from Wipro a year before his term ends, with the IT firm appointing 30-year Wipro veteran Srinivas Pallia as his replacement.
Delaporte was appointed in May 2020 for a period of five years, and was due to stay on until July 2025. While CEO exits are usually a negative surprise for various stakeholders, the writing has been on the wall for a while for the IT giant.
Here's a look at five key reasons why Delaporte may have chosen to call it a day, just two weeks before the Bengaluru-based company is scheduled to announce its January-March quarterly results.
1. Underwhelming performance
Wipro has been underperforming its larger and smaller peers and has been on a downward slope for an extended period. Under Delaporte’s watch, the company has slipped to number four in terms of market capitalisation from the third spot. Over the years, Wipro has also lost its tag as India's third-largest IT firm in terms of revenue.
Since Delaporte assumed leadership, the company spent at least $2-3 billion in acquisitions.
Even in the previous quarter, the company had reported a fall in profit for the fourth consecutive quarter, falling 12 percent year-on-year (YoY) to Rs 2,694 crore.
The Bengaluru-headquarter company had also adjusted its revenue growth guidance at both the lower and upper end. It revised its revenue growth guidance to -1.5 percent to 0.5 percent. This came after the company slashed the guidance to -3.5 percent to -1.5 percent in the previous quarter.
Also read: Who is Srinivas Pallia, the new CEO and MD of Wipro? Here is all you need to know
2. Top-level exits
The Bengaluru-based company has seen a massive churn at the top level over the last two years.
In 2023 alone, over 10 senior leadership members had quit the company including chief growth officer Stephanie Trautman, chief financial officer Jatin Dalal, chief operations officer Sanjeev Singh, India head Satya Easwaran, iDEAS business head Rajan Kohli, among many others.
That’s not all; the company sued its former CFO Jatin Dalal for violating a non-compete clause in his employment contract by joining a rival company in less than 12 months. Dalal was involved in key large deals, making him privy to sensitive business information.
Also read: Not against any individual, it's about contractual obligations: Wipro
The company also initiated multiple reorganisations, making it prone to the disadvantages of frequent operating changes. For example, in December Wipro restructured its chief growth office (CGO). The company started integrating the Strategic Pursuits team, formerly under the CGO, into the Strategic Market Units (SMUs).
Delaporte said this would allow the company to build on the processes and approaches developed by the CGO and bring this experienced team closer to clients and on-the-ground sales teams.
Suresh Senapaty, former board member of Wipro and one of Azim Premji’s most trusted advisors, expressed his personal disappointment at CFO Jatin Dalal’s abrupt exit, urging the IT firm to work harder to retain talent. "Wipro must regain its intolerance towards losing great talent by working deeper in understanding its talent repository," he told Moneycontrol.
Also read: Srinivas Pallia’s ascent to Wipro CEO will ensure smooth transition, say industry experts
3. Cultural shift
The company has hired many key management personnel externally, particularly expats in many roles.
Delaporte himself was brought in from Capgemini and was based in Paris, while most of Wipro’s operations were based in India. Former Chief Growth Officer Stephanie Trautman came in from rival Accenture.
The influx of talent from different countries coupled with the departure of long-standing Wipro veterans may have contributed to a sense of disconnect within the organisation.
4. Azim Premji's dissatisfaction
Wipro’s founder chairman Azim Premji is learnt to have been unhappy with Delaporte’s performance and the larger issue of senior executives quitting the firm.
But his son and Wipro chairman Rishad Premji backed Theirry at every turn, saying he has the board’s support. The whispers of Premji senior’s unhappiness with leadership continued to get stronger, with some external candidates also being tapped for the CEO role in recent months.
5. Tyranny of distance
Delaporte's rationale for operating out of Paris for an Indian-based firm was that this would position him closer to the company's clients in Europe and North America, which are key markets for the IT major.
The absence of the CEO from the company's headquarters could have resulted in a lack of strategic guidance, reduced morale, and uncertainty among employees.
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