Wipro's CEO, Neemuchwala, will resign 1 year before his term ends

BENGALURU: In a widely expected move, Wipro's CEO, Abidali, resigned, one year before his five-year term ended. Neemuchwala cited family commitments, but analysts say the decision would also have been driven by the company's lackluster performance. He will continue to hold the position until a successor is appointed to ensure a smooth transition.

Chosen by hand by Wipro promoter Azim Premji in 2015, Neemuchwala, who had spent 23 years with TCS, tried to launch Wipro's sales and delivery engines. But the efforts did not work as expected, and the company's growth rate continued well behind that of its TCS, Cognizant, Infosys and HCL peers.

Moshe Katri, MD of Wedbush Securities, based in the United States, said that in recent years, the company's financial metrics performed consistently lower in relation to its level 1 peers. “Structurally, in relation to its peers In the sector, we believe that Wipro continues to have substantial exposure to legacy-based projects. The delivery of these projects is gradually changing to alternative means, including SaaS, cloud and automation, which triggers persistent cannibalization in Wipro's revenue growth. In our opinion, the Wipro Board has the opportunity to nominate a change agent with the mandate to make the business transition, he said.

Phil Fersht, CEO of HfS Research, based in the United States, said Neemuchwala's mandate at Wipro was plagued by a constant struggle to change the company's leadership culture. “I was interested in bringing a start-up mentality to drive more entrepreneurship and creative ideas, and it had some success, such as the acquisition and expansion of Topcoder and the establishment of the Rishad Premji venture capital fund. However, he did not make all the changes he would have liked and was in a constant battle to instill his spirit, he said.

Live plus Neemuchwala's exit comes soon after another very modest quarterly performance, and forecast of an even plus modest Q4 performance. Under Neemuchwala, Wipro grew at a CAGR of 3%. Under his predecessor, T K Kurien, it grew at 6.5%, but even that was below that of its peers. HCL pulled ahead of Wipro for many quarters to emerge as India’s third largest IT service provider in 2018-19. During Neemuchwala’s tenure, Wipro’s shares rose 13%, while Infosys’ grew 33% and TCS’s rallied 78%.

Neemuchwala, 52, said, “It has been my honour and privilege to serve Wipro, a company with a rich legacy of almost 75 years. We have made considerable progress in our transformation journey, improved our de Live ry engine and institutionalised deeper client-centricity. I thank Azim Premji, Rishad, our Board of Directors, my Wipro colleagues and customers for their support over the years.”

Rishad Premji, quien es presidente ejecutivo, probablemente desempeñará un papel plus importante ahora, al menos hasta que la compañía identifique un nuevo CEO.