Cost optimisation at Wipro: Hundreds of mid-level jobs slated for elimination, says report

Wipro, one of India's leading IT services companies, is undergoing a significant restructuring process, resulting in the elimination of 'hundreds' of mid-level roles at its onsite locations. This move comes as the company strives to bolster its profit margins, according to sources familiar with the situation speaking to ET Prime.

With Wipro currently holding the lowest margins among the top four India-listed IT services firms, the pressure to enhance profitability is palpable. In contrast to Wipro's margin of 16% for the December quarter, competitors Tata Consultancy Services, Infosys, and HCL Technologies reported significantly higher margins of 25%, 20.5%, and 19.8%, respectively.

Sources reveal that the job cuts primarily target mid-level executives stationed onsite, with notifications of termination issued earlier this month. The decision is attributed to the company's costly resources at Capco, a consulting firm acquired by Wipro for $1.45 billion in 2021, marking CEO Thierry Delaporte's major investment initiative.

However, as global economic conditions fluctuated post-Covid, the anticipated growth trajectory faltered, leading to a slowdown in the consulting business as clients scaled back on expenditures. In response to inquiries from ET Prime, a Wipro spokesperson emphasised the necessity of aligning business strategies with the evolving market landscape, reaffirming the company's commitment to enhancing client and employee experiences through investments in technology and talent.

Described as part of a 'Left-Shift' strategy, the restructuring involves redistributing workload responsibilities, with tasks traditionally assigned to higher-level employees now delegated to lower tiers. This realignment aims to optimise efficiency through automation while acknowledging the challenges faced by CEO Thierry Delaporte in maintaining a delicate balance between margin improvement and sustainable growth, amidst criticisms of talent loss and employee morale impact.

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