Wipro, an IT giant established by Azim Premji, announced plans to fire hundreds of mid-level employees to reduce expenses. Wipro’s margin was the lowest among its listed competitors at 16%. According to the ET, which cited a person with knowledge of the situation, employees have been notified since January 1, 2024. The layoffs affect hundreds of mid-level executives who are employed by Wipro on-site.
As we move forward in 2024, we are seeing a new wave of layoffs all over the world in the tech industry. To save expenses, corporations like Google, Amazon, and Microsoft have lately let go of thousands of employees.
Currently, Wipro is struggling with having the lowest profit margins out of the four biggest IT services businesses listed in India. With a margin of only 16 percent in the December quarter, it was far less than that of Tata Consultancy Services (25 percent), Infosys (20.5 percent), and HCL Technologies (19.8 percent). To grow its business, the organization is currently preparing to eliminate a few positions.
Mid-level executives are the main targets of the job losses, particularly those who work onsite. The decision is purportedly related to the business’s $1.45 billion acquisition of consultancy firm Capco in 2021, spearheaded by CEO Thierry Delaporte. However, the consultancy industry was damaged by the post-Covid economic slowdown and decreased customer expenditure, leading to cost-cutting measures.
Why is Wipro laying off mid-senior executives?
Despite Wipro’s return to growth, Capco’s mid-level executives are a costly resource. Increasing Wipro’s margins is the job assigned to Group CFO Aparna Iyer, the source continued. The plan calls for the job burden to be shifted to the next level, meaning that a level 3 employee’s task would transfer to a level 2 employee, and a level 1 employee would assume the responsibilities of a level 2 employee, job cuts being part of ‘Left-Shift’ strategy.
Wipro purchased the consulting business Capco in 2021 for a reported $1.45 billion. However, COVID-19 and other geopolitical developments created challenges for the consulting industry on a worldwide scale. According to a corporate representative, Wipro is dedicated to investing in its people, processes, and technology while also adapting to changing markets.
According to them, the corporation aimed to develop into a “high-performance, agile, and resilient organization.” With a 14.2 percent attrition volume, Wipro’s headcount decreased by 4,473 to 2,40,234 at the end of the third quarter of FY24.
It is the Bengaluru-based company with the lowest operating margins out of India’s four biggest IT firms. Revenue for Wipro decreased by 12% on an annual basis in the December quarter. The corporation recorded a decrease in earnings for the fourth quarter in a row.
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