Four top exits in a month shake Wipro

At least four senior executives overseeing business in four countries have left Wipro in the last month, even as the company is considering appointing a former Capgemini executive, Amit Choudhary, as the new chief operations officer (COO), according to two executives familiar with the development. It is not clear what role will be given to the incumbent COO, Sanjeev Singh, who took on the current role in January last year.

Douglas Silva, who was entrusted in January last year to oversee business in Brazil, and Tomoaki Takeuchi, who joined as head of business for Japan in February last year, left Wipro last week. Sarah Adam-Gedge, who took over as managing director of Australia and New Zealand in April last year, has moved out too. Wipro’s head of business for the Middle East region, Mohammed Areff, who joined in September last year, has also left.

Mint could not ascertain the reason behind these executive departures.

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“Sarah Adam–Gedge, managing director, Australia and New Zealand; Douglas Silva, country head for Brazil; Tomoaki Takeuchi, country head & managing director for Japan; and Mohammed Areff, country head and managing director, Middle East, have decided to pursue opportunities outside the organization," said a spokesperson for Wipro.

“Under the leadership of CEO and managing director Thierry Delaporte, Wipro had undertaken an organizational realignment to address changing business requirements and help build an innovative company that is externally focused and client-centric," the spokesperson added.

On the question of appointing a new COO, Wipro said it does not comment on speculation, stating, “Any organization-level change will be communicated by the company."

The four senior executive departures follow a company-wide restructuring, under which at least a third of the 750 executives at the rank of general manager and above were asked to leave in the last two years, one of the two executives said.

Delaporte, who took over as chief executive in July 2020, brought in several executives from outside the company to shake things up and revive growth.

It started well. Wipro reported a 27.3% growth to end FY22 with $10.35 billion in revenue. About $850 million of this came from its four acquisitions, implying Wipro’s organic growth was 17%, shows an analysis by Mint.

But much of this growth came at the expense of profitability: Wipro’s operating margin shrank from 19.2% at the end of June 2020 to 15% at the end of June this year. This 420 basis points decline in profitability is the steepest decline over a two-year period across any homegrown technology services company in the past two decades. Wipro claims much of this decline in profitability is on account of the acquisitions, for which the company has spent $1.8 billion.

A churn in senior leadership also impacts Wipro’s ability to consolidate business from these acquisitions.

Wipro acquired Australian cybersecurity firm Ampion last April for $117 million. The departure of Adam-Gedge could impact Wipro’s ability to successfully integrate the firm.

Wipro does not give full-year revenue growth guidance, but the management has said it expects to grow in “double digits" in the current year. Still, at least half a dozen executives said the company’s organic growth would be less than the 17% it managed last year. More executive departures, which some of them attributed to the CEO’s tough management style, could portend trouble for the company.

“Many executives who had been with the company for years were asked to go because the new leadership did not see a role for them. That is okay. Every new CEO wants to have his set of people to execute the strategy. Two years later, and the question is if the company is in better shape under the new leadership?" asked a second executive. “I really don’t think so, and my fear is if the company is headed the Cognizant way."

To be sure, comparing Wipro to Cognizant Technology Solutions Corp. may not be entirely correct as things have not deteriorated at the Bengaluru-based IT services company. Teaneck, New Jersey-based Cognizant appointed Brian Humphries as chief executive in February 2019, and since then, the firm’s growth has trailed its peers. Under Humphries’s watch, 17 of the 18 senior executives mentioned in the company’s annual report for the year 2019 have left the company.

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