Wipro, one of India's leading IT companies, found itself in turbulent waters as its share price took a notable dip of 2.5% on the Bombay Stock Exchange (BSE). The catalyst behind this abrupt downturn was the surprising exit of Jatin Dalal, who had served as the company's Chief Financial Officer (CFO) for an impressive two decades. This unexpected departure has sent ripples through the corporate landscape and has ignited concerns regarding the dwindling pool of seasoned insiders within Wipro's ranks.
Dalal's farewell marks yet another high-profile exit in what appears to be a growing trend within the company. Over the past year, more than a dozen influential leaders have bid adieu to their roles at Wipro. All this is transpiring during the fourth year of CEO Thierry Delaporte's tenure, which has been defined by ambitious turnaround efforts that are still a work in progress.
Suresh Senapaty, a former Wipro CFO, expressed his dismay at the loss of Dalal, describing him as a "huge leadership talent." Senapaty, while acknowledging Dalal's decision to explore opportunities outside Wipro, expressed confidence in the company's ability to navigate this challenging transition, citing the deep pool of finance talent that has been cultivated over time.
However, a closer look reveals potential sources of discontentment at the upper echelons of Wipro's leadership. A massive restructuring effort resulted in the departure of 75 senior Vice Presidents and Vice Presidents, along with 300 general managers in the initial phase. Simultaneously, Delaporte brought in several senior regional leaders from outside the company. While it's unclear whether this restructuring directly contributed to the recent exits, it is worth noting that earlier in the year, several top-level executives also left their positions.
Rajan Kohli, who had spent nearly three decades at Wipro, resigned from his role as president. Kohli had been responsible for leading Wipro's Integrated Digital, Engineering, and Application Services Business line (iDEAS), overseeing a massive team of over 100,000 employees. Shortly before Kohli's departure, Angan Guha, with a similarly impressive tenure at Wipro, left the company. Guha had overseen a diverse portfolio spanning financial services, manufacturing, energy & utilities, hi-tech, and Canada operations. Notably, he had headed what Wipro refers to as America's 2 strategic business unit, contributing over 31% of Wipro's global revenue. Guha's current role is CEO & MD at Birlasoft, headquartered in Pune. Additionally, Sanjeev Singh, the former COO at Wipro, recently left to join CMS IT Services as CEO & MD.
The challenging transition Wipro is undergoing has not gone unnoticed by industry experts. Phil Fersht, CEO of US IT advisory HfS Research, acknowledged the difficulty of Delaporte's changes but believes that the board will continue to support him. However, the company can ill-afford to lose more leadership figures at this critical juncture. Delaporte's success in galvanizing the team and producing positive results by year-end is of paramount importance.
Wipro faces several challenges, including trailing its peers in revenue growth and grappling with margin pressures. Analysts at Kotak Institutional Equities, namely Kawaljeet Saluja, Sathishkumar S, and Vamshi Krishna, expressed concerns about the company's prospects, expecting it to underperform peers in terms of growth in FY2024 and the medium term. While some of the leadership changes may have been necessary to address underperformance, the continued loss of key leaders as Wipro enters its fourth year of turnaround efforts is viewed unfavourably.
As the dust settled on Dalal's departure, speculation arose about potential disagreements he may have had with certain members of the management regarding low-margin deals. CFOs typically have a vested interest in maintaining and improving profit margins, often scrutinizing and rejecting business proposals that fail to meet these criteria. In response to these speculations, Wipro issued a statement affirming Dalal's significant contributions and his positive relationships with the company's leadership team.
The company also emphasized that Dalal's decision to explore new career challenges was made of his own accord and was part of the company's succession planning. In preparation for Dalal's departure, Aparna, another capable leader, had been identified and groomed for the role. Despite the challenges ahead, Wipro remains committed to its ongoing transformation under CEO Thierry Delaporte's leadership.
