The departure of Delaporte early this month, one year short of completing his full term, and the induction of Srinivas Pallia, a Wipro veteran, in the corner office has stoked apprehensions about a reorganization within the executive committee–one of Wipro’s highest decision-making bodies–or another top-level exodus. Experts, incidentally, are divided over the possible impact.
An analysis by Mint shows that at least three of the ‘Thierry 18’ came from Capgemini, akin to Delaporte.
Anis Chenchah worked with Capgemini for 15 years until he joined Wipro in April 2022 as CEO of Wipro’s Asia-Pacific, Middle-East and Africa (APMEA) region. Amit Choudhary, who had also worked in the French IT firm for 15 years, joined six months later and was handed the COO baton. Lastly, Ajit Mahale, who worked in Capgemini until January 2021, joined Wipro as its chief delivery officer in February 2023.
In their earlier roles in Capgemini, Chenchah, Choudhary and Mahale held positions of CEO for Capgemini Business Services, chief operating officer (COO) and executive vice-president (EVP) of Capgemini’s global financial services strategic business unit, and vice-president (VP), respectively.
Of these 18, six members are based in India, and 12 abroad. With the other 13 who were in the committee before Delaporte also being from overseas, this implies that 4/5th of the executive committee is based abroad. That is perhaps to be expected as Wipro gets nearly 90% of its revenues from the Americas and Europe.
Mint’s queries to Wipro were unanswered until press time.
Executive search firms have differing opinions on the future of not just the “Thierry 18″ but also of the executive committee itself.
Some, like ABC Consultants’ Ritu Sethi, expect definite churn. Sethi, who is partner – technology, offshoring and outsourcing at the New Delhi-based senior executive search firm, said she expects 3-4 immediate exits, and a bigger churn over six months to a year, in an emailed response to Mint’s queries.
“We expect that as much as 40% of the current executive committee leaders brought in by Thierry Delaporte may depart in the next year,” said Sethi. “The people already there in the executive committee will take some time to settle under the new leadership and all eyes will be on Wipro.”
Others, like Navnit Singh of Korn Ferry, don’t see any movement from Wipro’s executive committee just because Delaporte has departed from the company.
“If Thierry has hired someone, everyone was involved in that decision-making, and it was not a unilateral decision,” said Singh, chairman and regional managing director of the executive search firm. “All members of the executive committee are there on the basis of their performance and will be there on that basis.”
On Wipro’s latest CXO changes involving internal candidates being given the top job, Singh said internal candidates always have higher motivation. “Additionally, internal candidates know the environment, the company culture, and loyalties to those individuals are also high,” he added.
An executive of a third search firm said chances of a mass departure of executive committee members leading to instability look bleak. “I can expect some reorganization within Wipro, but the existing executive committee members will not be sacked,” said the Delhi-based executive on condition of anonymity. “We expect most of the 18 members who joined the Wipro executive committee after Thierry joined as CEO to stay. It is important they show their mettle now and perform without the person who bought them in being in the company,” said the executive.
The executive added that Wipro would want to avert another top-tier exodus and the resultant instability by talking to them. On 25 December 2023, less than six months before Delaporte’s departure. Mint had reported that at least 22 senior executives ranked senior vice-president (SVP) and above had left the company after Delaporte took over as CEO.
That Wipro has to contain senior leadership attrition is a view echoed not just by executive search firms, but also by IT analysts.
“Senior leadership attrition has been high over the past two years and needs to be stemmed urgently, in our view,” read a note by Abhishek Bhandari, executive director, and Krish Beriwal, equity research associate at Japanese brokerage Nomura Group.
“We think the two key C-level roles (CEO and CFO) both have been replaced with internal candidates to signal confidence in the depth of senior leadership talent available at Wipro and to address the significant churn seen over the past two years,” read the Nomura note dated 7 April 2024.
Another Mumbai-based analyst echoed a similar opinion. “There is always a good correlation between stability of senior management teams and a sustainable level of growth. Companies doing well have had relatively stable senior management teams,” said the analyst on condition of anonymity.
Among Indian IT’s big four, Wipro’s profitability shrank the most between 30 June 2020, when Delaporte took over as CEO, and 31 December 2023. Wipro’s operating margins dropped 300 basis points from 19% to 16% in this period. Comparatively, India’s biggest IT company Tata Consultancy Services Ltd’s (TCS) operating margin grew 140 basis points during this time to 25%. Cross-city rival Infosys Ltd and cross-country rival HCL Technologies Ltd’s operating margins shrank 220 basis points and 70 basis in this time to 20.5% and 19.8% respectively.
Wipro is also the only company of the top four Indian IT to expect a full-year revenue decline, as per the company’s December quarter commentary.
Delaporte’s tenure as Wipro’s CEO was cut short after the board of directors noted his resignation on 6 April 2024. He was to serve as Wipro’s chief executive until July 2025.
The 31-member executive committee, which meets every quarter to do a strategic review of the company’s performance, is the only one of its kind among India’s top IT services companies. Also in the executive committee is the new CEO, Pallia, who has been with Wipro since 1992 and has mostly headed the Americas business.