Wipro’s appointment of Srinivas Pallia as the new CEO has garnered praise from industry experts, signaling a strategic move towards stability amid recent business challenges. Pallia, a seasoned company veteran who previously led Wipro’s Americas I business, brings a wealth of experience to the role.
The decision comes as Thierry Delaporte, the current CEO, steps down prematurely, despite his contract running until July 2025.
Experts have applauded the choice of Pallia, emphasizing the potential risks associated with hiring an external CEO. The turnover of several senior leaders between Delaporte and Abidali Neemuchwala’s tenures has posed challenges to Wipro’s business continuity and client relationships.
In 2023, Wipro witnessed a significant departure of senior leaders, including key figures such as Stephanie Trautman, Jatin Dalal, and Sanjeev Singh.
Phil Fersht, CEO of HFS Research, highlighted the importance of reinstating Wipro’s traditional culture amidst recent disruptions. He underscored the stability brought by Pallia and Suzanne Dann, CEO of Americas, emphasizing the significance of US-based leadership.
He emphasized, “While external candidates were under consideration, the importance of selecting an individual deeply ingrained in Wipro’s ethos to reinvigorate the workforce was evident.”
Gaurav Vasu, the CEO of Unearthinsight, underscored Pallia’s elevation as a swift transition, leveraging his extensive leadership experience in Wipro’s critical North American sector, which stands as the largest market for IT services.
He further elaborated, “Bringing in an external CEO involves substantial costs, a risk Wipro, currently the slowest-growing among its peers, cannot afford to take lightly.”
Gaurav Parab, serving as Principal Research Analyst at NelsonHall, highlighted the multifaceted challenges that Pallia is poised to encounter, ranging from internal intricacies at Wipro to the broader industry dynamics.
Yugal Joshi, Partner at Everest Group, shared insights, stating, “Wipro’s performance challenges have persisted over an extended period, rendering this transition foreseeable. With prior leadership grooming internally and potential personal motivations for Delaporte’s departure, stakeholders must contemplate the firm’s turnaround prospects, buoyed by its robust technical capabilities.”
Wipro’s Performance:
Wipro’s financial performance has been under scrutiny, with net profits witnessing a consecutive decline over the past four quarters. For the third quarter ending December 31, profits plummeted by 12% YoY to Rs 2,694 crore.
Furthermore, the company revised its revenue growth projections for the fourth quarter, narrowing the range from -1.5% to 0.5%, following previous downward revisions between -3.5% to -1.5%.
Analysts speculate that Delaporte’s sudden exit may signal continued challenges in the fourth quarter.
Pareekh Jain, Founder and CEO of EIIRTrend, stressed the importance of addressing employee morale and curbing senior-level exits. He emphasized the necessity of securing significant deals to enhance competitiveness, awaiting Pallia’s potential impact.
Parab acknowledged Delaporte’s contributions to restructuring Wipro’s organizational and cost structures, notwithstanding subdued growth and overall performance challenges.
Sources: moneycontrol.com