To retain talent, Wipro doles out record number of promotions

Wipro now has 200 vice-presidents and 32 senior vice-presidents working under CEO Thierry Delaporte.
Wipro now has 200 vice-presidents and 32 senior vice-presidents working under CEO Thierry Delaporte.

Summary

Promotions and raises have been a key part of Wipro’s retention strategy as it faces high employee turnover.

Wipro Ltd has promoted a record number of executives, elevating 12 to senior vice-president and 61 to vice-president positions in an effort to bolster its leadership team.

The company now has 200 vice-presidents and 32 senior vice-presidents working under CEO Thierry Delaporte after key senior exits from the company.

“As we grow and evolve as a company, it is important to ensure that we have the right leadership at the helm. We can confirm that 12 senior executives have been promoted to the post of senior vice-president. Additionally, 61 executives have been elevated to the position of vice-president, the highest number of V-P promotions that Wipro has ever made," said the company in response to an email query.

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The beefing up of senior teams comes at a time when promotions are integral to retaining senior leadership talent. The company, which in the July-September quarter clocked an attrition of 23.3%, will announce its December-quarter earnings on Friday.

Last year, at least four senior executives overseeing business in four countries quit Wipro. They included Douglas Silva, who had to oversee business in Brazil; Tomoaki Takeuchi, who joined as head of business for Japan; Sarah Adam-Gedge, who took over as managing director of Australia and New Zealand; and Wipro’s head of business for the Middle East region, Mohammed Areff.

Promotions and raises have been a key part of Wipro’s retention strategy as it faces high employee turnover. The company reported a 23% attrition in the July-September quarter, among the lowest among its peers. During the quarter, Wipro also rolled out a 10% hike to its employees. However, the downside of this strategy is that it also entails higher wage costs, consequently hurting profitability. Wipro’s operating margin was 15.1% in the second quarter, the lowest among its peers.

Wipro is set to announce its earnings for the December quarter on Friday.

The company’s efforts to retain employees come amid an industry-wide trend of high job turnover called the Great Resignation. But the fear of an upcoming global recession has led to more employees delaying job changes. This trend is reflected in Tata Consultancy Services, India’s largest IT services firm, reporting 21.3% attrition in the October-December period, a decline of 20 basis points from the preceding three months. The company expects fewer people to leave in the coming quarter, even as it reported a sequential decrease in its workforce.

Analysts anticipate Wipro’s performance in the December quarter to be weak, primarily due to the impact of holidays in Western countries reducing the number of billing days for Wipro’s engineers working on customer projects.

“Growth in the December quarter should remain soft, within the management’s guidance band provided owing to heightened furloughs. Margins to remain in a narrow band given the two-month impact of wage hikes," said Motilal Oswal Financial Services.

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