Wipro is planning to cut hundreds of mid-level jobs onsite as it attempts to improve its margins, reported ET Prime. As per the report, sending out intimations began earlier this month and mid-level employees onsite would be let go.
The report also mentioned that the job was part of a Left-Shift strategy. By this the work of level 3 employee is shifted to level 2 employee and level 1 employee takes up level 2 job. Meanwhile, level 1 jobs will be automated.
Among the four largest India-listed IT services companies, Wipro has the lowest margin. Its marging in the December quarter came in only at 16% while Tata Consultancy Services, Infosys and HCL Technologies reported margins of 25%, 20.5% and 19.8% respectively.
The ET Prime report also mentioned that Wipro's Chief Financial Officer Aparna Iyer has been tasked with showing better margins this year.
“They have very expensive resources onsite in Capco, and even though the growth is coming back, it is not enough. Aparna (Iyer - Wipro Chief Financial Officer) has been tasked with showing better margins this quarter,” ET Prime's source said.
Wipro had acquired Consulting firm Capco in 2021 for $1.45 billion. The consulting business dropped post pandemic as consumers curbed spending.
“Aligning our business and talent to the changing market environment is a critical part of our strategy as we look to build a resilient, agile, and high-performance organisation,” a Wipro spokesperson said in response to questions from ET Prime.
The job cuts come even as Wipro's CEO Thierry Delaporte is faulted for losing senior talent and impacting employees' morale. He also has a tough job of trying to balance the margin and growth, which are conflicting goals.
“Wipro still has both a talented workforce and leadership team. However, execution is an issue and Wipro continues to underperform against its peers. I believe Wipro is trying to do too much too quickly. It is trying to address its margin and profitability at the same time it is attempting to regain its growth leadership and market differentiation,” Peter Bendor-Samuel, CEO, IT consultancy Everest Research told ET.