Meta Platforms Inc has slashed at least a quarter of the IT work it outsources to Wipro Ltd after an artificial intelligence (AI)-led overhaul led to the shutdown of its digital marketing arm, marking the second major business loss from a top client for India's fourth-largest IT services firm in under six months.
According to two people aware of the matter, Wipro is now expected to generate about $75 million in annual revenue from Meta after the social media company ended outsourcing for its digital marketing work.
In fiscal year 2026 (FY26), Wipro generated about $100 million in annual revenue from Meta, which is among the IT services company’s 20 largest accounts. The Bengaluru-based firm manages IT support, customer services, and digital marketing-related work for the firm.
“For now, the company has done away with about $25 million as it embarked on a cost-reduction drive,” said the first of the two people cited earlier, both speaking on condition of anonymity.
As part of the work that Meta pulled back from Wipro, the IT firm's employees integrated ads for Meta’s clients on its social media platforms. However, Wipro was not the only firm to lose this business.
According to the second person cited earlier, Concentrix Corporation, Teleperformance SE, and Accenture Plc were among the other firms that lost parts of this work as Meta shuttered its digital marketing arm.
Emails sent to Wipro and Meta on 25 July went unanswered.
The impact
The pull-back of work has hit employees the hardest, with at least 200 Wipro employees managing the account from its Gurugram office being placed on the bench. According to the second person, an email was sent earlier this month regarding the termination of this work, and each of the 200 have been benched to be redeployed in other projects.
To be sure, homegrown IT services companies usually partner with large technology firms through annual contracts, with businesses coming up for renewal every year.
For Wipro, this loss of business comes even as the company struggles to reverse its fortunes under Srini Pallia, who took over as chief executive in May last year. It ended last year with $10.5 billion in revenue, down 0.3% on a yearly basis.
This is the second jolt that the company has faced in less than six months.
According to a Mint report on 3 March, Wipro lost up to $100 million in annual revenue from New York-based Estée Lauder. The global cosmetics major shifted the Bengaluru firm’s share of work in a half-a-billion dollar, five-year deal to Accenture.
The loss of business and clients further raises concerns over Wipro’s ability to turn around its fortunes as India’s $300-billion IT sector faces an existential challenge from the rise of automation tools and an uncertain demand environment.
The company, which gives quarterly guidance, expects revenue to decline towards the lower end of the -1.5% to 0.5% range in Q2FY27. Investors have been wary as the company’s shares have fallen more than 31% since the start of the year.
Brokerages expect the company to have another muted year in FY27.
“We believe demand remains constrained by longer decision-making and slower project execution, while AI-led productivity continues to limit growth from the existing business. We expect WPRO to lag peers, with FY27 likely to be another year of flat to slightly negative growth,” said Motilal Oswal Financial Services analysts Abhishek Pathak and Keval Bhagat, in a note dated 16 July.
However, the current loss of business is not a reflection of any shortcomings at Wipro, as Meta’s decision is driven by a larger push to bolster internal capabilities and ramp up technology investments
“We are investing aggressively to meet our infrastructure needs and ensure we maximize our strategic flexibility over the coming years. This includes substantially expanding our own data center footprint and striking deals throughout the supply chain to secure necessary components for future capacity. We are also signing cloud deals that will come online over the course of this year and 2027, allowing us to scale more quickly,” said Mark Zuckerberg, chief executive of meta, during the company’s post-earnings conference call on 29 April.
The company’s management added that this would lead to layoffs, reinforcing an earlier statement on reducing dependence on tech vendors.
“Over the next few years, we’ll be deploying these more advanced AI systems across our apps once we’ve seen them consistently perform better than our current methods of content enforcement, transforming our approach. As we do this, we’ll reduce our reliance on third-party vendors for content enforcement and focus on strengthening our internal systems and workforce,” read a Meta release dated 19 March.
The social media giant, which ended last year with $201 billion in revenue, said it will do away with human intervention in work related to review of graphic content, etc.
“While we’ll still have people who review content, these systems will be able to take on work that’s better-suited to technology, like repetitive reviews of graphic content or areas where adversarial actors are constantly changing their tactics, such as with illicit drugs sales or scams,” read the Meta release.