With Delaporte gone, can legacy hand Srinivas Pallia steer Wipro through AI age?

Srinivas Pallia, the new CEO of Wipro.
Srinivas Pallia, the new CEO of Wipro.


  • ‘Wipro is like a perpetual turnaround story’. Heard that line before? Well, the company has lagged peers. And having had eight CEOs since 2000 conveys a leadership continuity challenge. TCS, in its 55+ year history, has had fewer bosses. Pallia, therefore, has a difficult job.

New Delhi: If avid hiker Srinivas Pallia, 56, was looking for new summits to scale at the fag end of his career, he is in the right place. A Wipro veteran, Pallia, who has spent 32 years at the company, knows the culture, the people, and the Wipro way. He also knows the clients, having personally brought in many of them, including Estee Lauder, a New York-based beauty products maker, and Tapestry, an American luxury company, according to people in the know. Pallia has seen Wipro grow from nothing to become one of India’s top three IT services companies, behind TCS and Infosys, in the $250 billion industry. He has also seen the $11 billion company underperform in recent years, ceding the third spot to rival HCL Tech in 2022.

Regaining that space in the pecking order looks a big ask, as of now. The challenges for Srini, as he is known, are so daunting that if he indeed overcomes them and helps Wipro regain its mojo, he will become the subject of discussions over business podcasts and case studies on turnarounds in B-schools.

“Wipro is like a perpetual turnaround story," said Girish Pai, consultant research analyst at securities brokerage Nirmal Bang. “Outside of the pandemic years, it has struggled to keep pace with its peers." According to Nirmal Bang Institutional Equities, 2023-24 was very challenging for Wipro and this year isn’t looking great either. It has a “sell" recommendation on Wipro with a target of 441, a 7.5% drop from its 10 April closing price of 477.70.

Systematix Institutional Equities, meanwhile, has a “hold" rating on Wipro with a target of 440 per share.

Employee exodus

Outgoing CEO Thierry Delaporte. (Photo: PTI)
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Outgoing CEO Thierry Delaporte. (Photo: PTI)

The Bengaluru-headquartered company has seen an exodus of top talent, including chief financial officer (CFO) Jatin Dalal, who joined rival Cognizant, and Rajan Kohli, the digital business head, who joined as chief executive officer (CEO) of Citrus Tech last April. Chief growth officer Stephanie Trautman quit last December to “pursue goals outside Wipro".

More than 20 executives ranked senior vice president and above quit Wipro on outgoing CEO Thierry Delaporte’s watch. In the middle rung, almost half of the 750 executives designated general manager and above quit in the last four years. Interestingly, Pallia will be the eighth CEO since Y2K to lead Wipro. The top job has been rotated among outside hires and internal candidates, and half of them, including Thierry Delaporte, left before completing their terms.

While leadership continuity is a challenge, Wipro’s metrics also paint a picture of a company struggling to regain its stride. The top four services providers have seen their operating margins contract in recent years, with Wipro reporting the largest contraction of 570 bps, between the December 2020 and 2023 quarters. It reported the lowest margin of 16.1% for the quarter ended December 2023, when TCS reported 24.2% and HCL Tech, 18.5%.

Delaporte led Wipro to a dozen acquisitions in a bid to accelerate growth and improve margins, including Capco, the largest in Wipro’s history, but those bets haven’t begun paying off. The $1.45 billion buyout of banking and financial services (BFSI)-focused consulting firm Capco, which could potentially catapult Wipro’s performance, is yet to deliver. In an email to employees on 7 April, Delaporte noted, “12 acquisitions is no mean feat of vision, strategy and effort from you all, especially when two of them happen to be among the largest ones in Wipro’s history—Capco and Rizing."

Wipro bought Rizing, a Connecticut-based global SAP consulting firm, for $540 million in April 2022 to bolster its SAP cloud practice.

Paris-based Delaporte, the first expat CEO to head Wipro, resigned on 6 April, about 15 months before the end of his five-year term. Surprisingly, in January, Wipro’s chairman Rishad Premji said in Davos that he had full confidence in the Frenchman. Delaporte’s appointment in May 2020 was Premji’s first big decision after taking over as chairman in June 2019.

Critics will argue that Delaporte was not given enough time to show that key acquisitions, including Capco and Rizing, will pay off. Also, when Delaporte joined Wipro on 6 July 2020, the company’s market cap was around 1.17 trillion. It was at 2.53 trillion on the day he quit.

Emails sent to Wipro on the leadership change remain unanswered.

Pallia: Wipro’s nice guy

An engineering graduate with a master’s from IISc-Bangalore, Pallia has never worked outside Wipro. His five-year stint as CEO started on 7 April. In an email to employees, which sought to motivate the 245,000 Wiproites, Pallia said resilience, tenacity, and adaptability are among the qualities that will guide him as a leader.

Within Wipro, Pallia has held eight leadership roles across divisions, including business application services, and the RCTG (retail, consumer goods, transport & government) business unit.

Tech leaders Mint spoke with had mostly positive things to say about Pallia. “A nice guy, down to earth, humble, typical Indian IT guy," said one, on the condition of anonymity. Jessie Paul, who worked as chief marketing officer of Wipro before starting her advisory firm Paul Writer, added, “Pallia was considered a young achiever even in his 40s. But leadership roles in Wipro have mostly gone to people in their 50s."

Interestingly, Wipro’s rivals have often bet on younger talent for top jobs. N. Chandrasekaran, Nandan Nilekani, and Vineet Nayar were all in their 40s when they took over the CEO mantle at TCS, Infosys, and HCL Tech, respectively, and put their companies on a high growth path.

N. Chandrasekaran was in his 40s when he took over as the CEO of TCS. (Photo: Mint)
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N. Chandrasekaran was in his 40s when he took over as the CEO of TCS. (Photo: Mint)

Pallia has been on the sales track. “He believes in building the brand," said Paul. This quality perhaps helped Pallia to win many global clients on his own. That includes various retail and consumer product companies, including Philip Morris, Nestlé, Walmart, Estee Lauder, Citibank, AT&T and Ford, according to multiple industry watchers. Wipro did not respond to Mint’s queries on Pallia being responsible for bagging the above customers.

Most recently, Pallia, who is based in New Jersey, spearheaded Americas 1, one of the four strategic market units (SMUs) for Wipro. SMUs were created by Delaporte in January 2021, replacing strategic business units. Americas 1 includes healthcare and medical devices, consumer goods and life sciences, retail, transportation and services, communication media and information services, tech products and platforms. On 10 April, Pallia appointed veteran Malay Joshi as the CEO of Americas 1, Wipro’s largest and fastest-growing market, accounting for around 32% of the business.

Angan Guha, who headed Americas 2 (accounting for 30% of the business), which included the important BFSI unit, quit in December 2022, moving to Birlasoft as its CEO. Guha was replaced by Suzanne Dann, who worked at Avanade, IBM, and EY before joining Wipro in 2022. She was among the many executives hired from outside Wipro during Delaporte’s time.

Wipro is at a stage where it cannot afford any more client, leadership or revenue shocks. — Gaurav Vasu

Pallia being an insider and lifelong Wiproite is “a big advantage" amid the current tech slowdown and artificial intelligence (AI)-led transformation, said Gaurav Vasu, CEO of Unearthinsight, a Bengaluru-based consultancy. “Wipro is at a stage where it cannot afford any more client, leadership, or revenue shocks. Pallia is close to clients in the largest market (the US) and has been involved in transformation discussions, so the transition will be smooth," said Vasu.

Being an insider, Pallia can hit the ground running, as he knows the company and its clients well. His presence will arrest the exodus of top talent and could also lead to the return of some of the executives who left because of the previous leadership.

“External CEOs have not been very successful at Indian IT services firms. The Tatas and HCL have traditionally relied on internal candidates. At this juncture, Wipro needs stability and an internal person can bring that. Also, Pallia knows the roots and was heading Wipro’s largest region. While he is the right guy, Wipro does not have a playbook for making internal CEOs successful. This is an opportunity for both Wipro and Pallia to show it can work," said Yugal Joshi, partner, Everest Group.

On the downside, having had eight CEOs since 2000 conveys a leadership continuity challenge. TCS, in its 55+year history, has had fewer bosses. One can argue that Wipro has been experimental with its leadership, with both internal and external candidates, including an expat. It even tried out a joint CEO model. The CEOs all had diverse backgrounds—T. K. Kurien was running energy and utilities, Abid Ali Neemuchwala came from TCS BPO, Delaporte was from Capgemini. If Wipro’s performance had not slipped, there would be no questions. But that’s not the case, and so the Wipro board and new CEO have to once again take on the onus of turning things around.

Missing on the leaderboard


To the company’s credit, so far, clients have not raised any questions on leadership. “They are in fact used to frequent CEO changes at Wipro," said one of top executives quoted earlier. The more pressing issue for the company is that it is not a leader in key business verticals. It is not known for leadership in too many industry verticals. For instance, the top three players in financial services are TCS, Accenture and Infosys. In healthcare, it is Cognizant, Accenture and TCS. Wipro doesn’t figure in the top three providers (in terms of revenue or growth) in financial services, insurance, manufacturing, retail or healthcare.

Wipro is among the leaders in energy and utilities, because of its acquisitions. But this segment is not as large a market as financial services or healthcare. Pallia has to address this problem.

The company is also known in a few other areas, such as research and development (R&D) outsourcing, infrastructure services and testing. Because of R&D, it can do well in engineering services as well, which is a focus for companies such as Tata Technologies, Persistent, and Cyient. It can also apply AI to testing and automation to scale its game, market watchers said.

Can Capco deliver?

The business leadership problem can be addressed by its Capco acquisition. “If Wipro has to play in applications, infrastructure and business processes, having a strong consulting layer is important. For Wipro to succeed, Capco has to succeed," said an executive, who did not want to be named. Capco offers services primarily in banking, capital markets, wealth and investment management, insurance, finance, risk, and compliance.

In the third week of March, Capco CEO Lance Larry stepped down to take on an advisory role. The London-headquartered Capco can open doors to exceptionally good customers in both the US and Europe. Also, Capco kind of buyouts are unique. It is rare to come across an acquisition where you probably have 30% revenue from the US and 30% revenue from Europe, said analysts. This gives a window to the two important geographies for business.

For Wipro to succeed, Capco has to succeed. — An executive

The mostly western workforce and different culture (from Wipro’s mostly Indian workforce) at Capco has made integration challenging. “Integrating consulting firms from UK/Europe has historically been challenging for Indian IT due to cultures, growth philosophy, and the pace of transformation. The recent layoffs of mid-senior executives at Capco is an outcome of inherited differences," said Vasu.

Pallia could keep it separate to tackle the culture part and focus on building business synergies, much like the Tatas have done with their European buyouts such as JLR and Tetley, said experts.

Catch the future

Wipro’s chairman Rishad Premji. (Photo: Mint)
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Wipro’s chairman Rishad Premji. (Photo: Mint)

While Pallia has to deal with the current issues at Wipro, including boosting employee morale and checking the exodus of top talent, the market itself is witnessing an AI-led disruption. Despite all his positives and strengths in being an insider, Pallia risks being labelled a “legacy guy", if Wipro falters in riding the AI wave.

“Wipro should look towards margin improvement to add more cash for investment in AI. The current investment on training (employees in AI) may not yield long-term results as retaining talent when the tide turns will be tough. AI investments will have to be around platforms and solutions," said Vasu.

Pallia has his task cut out to expand the existing business, focus on taking $100 million clients to $200 million; $200 million to $300 million and so on, as these are customers who have seen seven CEOs and don’t really mind seeing an eighth boss at the helm.

The new Wipro CEO does not have time on his side. The market is eagerly waiting for margin improvements, growth and new-business wins in the AI domain. Pallia, the hiker, could not have asked for more daunting terrain.

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