Wipro, one of India’s prominent IT companies, is reportedly in the process of laying off hundreds of mid-level onsite employees as part of a strategic initiative aimed at improving profit margins. The decision comes amidst growth challenges and a trailing performance in comparison to industry peers, compelling Wipro to take steps to enhance its financial standing. Employees received intimations of the layoffs in early January, with a particular focus on onsite resources in Capco, considered to be a costly segment. CFO Aparna Iyer’s objective is to showcase higher margins in the current quarter.
As of the December quarter, Wipro’s margins stand at 16%, placing it behind the other three major IT services companies in India. In contrast, HCL Technologies, Infosys, and Tata Consultancy Services reported margins of 19.8%, 20.5%, and 25%, respectively.
Reports suggest that these layoffs are part of Wipro’s ‘Left-Shift’ strategy, which involves assigning tasks of a level 3 employee to a level 2 employee, with automation handling level 1 tasks.
The acquisition of Capco for $1.45 billion in 2021, marking Wipro’s largest acquisition under the leadership of Thierry Delaporte, has faced challenges. The impact is attributed to a reduction in discretionary spending influenced by a slowdown in Western economies.
Despite the layoffs, Wipro emphasizes its commitment to investing in people, processes, and technology to enhance both client and employee experiences. This move aligns with the company’s strategy to adapt to the evolving market environment.
