Post-Covid economic uncertainties disrupted global conditions, causing a slowdown in the consulting business. Clients scaled back expenditures, impacting the anticipated growth trajectory.
Wipro initiates a substantial restructuring, eliminating ‘hundreds’ of mid-level roles at onsite locations to enhance profit margins. The move is part of the company’s efforts to navigate economic challenges, as reported by sources to ET Prime.
Wipro faces pressure to boost profitability as it holds the lowest margins among the top four India-listed IT services firms. In comparison to Wipro’s 16% margin for the December quarter, competitors TCS, Infosys, and HCL Tech reported higher margins of 25%, 20.5%, and 19.8%, respectively.
Wipro’s job cuts primarily focus on mid-level executives stationed onsite, citing costly resources from the recent $1.45 billion acquisition of consulting firm Capco in 2021. Notifications of termination were issued earlier this month, aligning with CEO Thierry Delaporte’s investment initiative.
As post-Covid global economic conditions fluctuated, Wipro faced a slowdown in its consulting business due to clients scaling back expenditures. Responding to ET Prime, a Wipro spokesperson highlighted the imperative to align business strategies with the evolving market landscape.
Wipro’s ‘Left-Shift’ strategy involves restructuring by redistributing workload responsibilities, delegating higher-level tasks to lower tiers to optimize efficiency through automation. CEO Thierry Delaporte faces the challenge of balancing margin improvement and sustainable growth amid concerns about talent loss and employee morale impact.
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