Wipro, the erstwhile top-three software bellwether, announced that its current CEO, Thierry Delaporte, will be leaving the company. Delaporte, the first expatriate chief executive to lead Wipro, took over the role on July 6, 2020, and had one year left in his five-year term. However, his tenure was marked by a value erosion of about a third in Wipro’s stock and an exodus of senior leadership. The decision for Delaporte’s departure was made after a closed-door meeting of Wipro’s key board members. Srini Pallia, a company veteran of three decades, will take over the role of CEO on April 7 for a term of five years.
Wipro, which began as a maker of vegetable soaps and consumer goods six decades ago, has been trailing behind Tata Consultancy Services, Infosys, and HCL Technologies in recent years. The company lost its position in the top three software companies to HCL Technologies a few years ago. Wipro’s underperformance and chronic struggles have led to criticisms and an exodus of senior leadership.
Delaporte’s departure signifies a return to a culture of entrusting a veteran with the top job. The company has faced difficulties with outsiders leading the company in the past, and insiders believe that an insider like Pallia is better suited to stabilize the ship. Pallia joined Wipro in 1992 and has held several leadership roles over the three decades, including president of the consumer business unit and global head of business application services.
Wipro’s revenues and profitability took a hit under Delaporte’s leadership. The company’s operating margin narrowed from 19% in June 2020 to 16% in December 2023. Experts have also noted that Wipro is struggling in its turnaround effort and has a weak mega deal pipeline, leaving it vulnerable to vendor consolidation. Last year, Wipro’s former CFO Jatin Dalal resigned abruptly to join rival Cognizant, leading Wipro to file a suit against Dalal and another former colleague who also joined Cognizant.
The decision for Delaporte’s departure comes ahead of Wipro’s announcement of its Q4FY24 financial results on April 19. Despite the challenges, Delaporte claimed that the leadership changes and the slowdown in growth are a result of a large-scale restructuring he is carrying out at the firm and that he has the full support of the Premjis and the board. Wipro’s chairman, Rishad Premji, expressed gratitude to Thierry for the changes implemented during his tenure, stating that they have better positioned the company for the future.
Delaporte will assist with the transition until the end of May. This sudden announcement has taken the market by surprise, although some experts believed that a change in leadership was imminent. Wipro’s board members have chosen Srini Pallia to take over the reins, believing that an insider with extensive experience in the company will bring stability and boost the company’s morale.
