On 26 March 2025, Wipro Ltd bagged a $650 million contract, spread over 10 years, from UK-based insurance company Phoenix Group, a firm traditionally serviced by Tata Consultancy Services Ltd (TCS), India’s largest IT services company.
The Phoenix deal followed another large contract in June 2024. Although Wipro did not name the client, it announced a $500 million, five-year contract, from a communications company based in the US.
Analysts and investors are no doubt wondering if the company’s lingering problems of tepid growth are finally solved, under the guardianship of chief executive officer (CEO) Srini Pallia, who completed a year in office on 6 April. He is Wipro’s eighth CEO since 2000. Pallia’s predecessor, Thierry Delaporte, resigned short of completing his five-year tenure.
Pallia, a veteran with over three decades at Wipro, may have started well, but faces daunting challenges. In the last few years, Wipro’s turnaround was hobbled by sweeping cultural changes, falling growth and profitability, a steady stream of senior leadership exits, and underperforming stock.
A lack of mega deals, which are contracts with a value of over $1 billion, compounded by the arrival of generative artificial intelligence, made things worse for the company. Wipro reported a full-year decline in the 12 months through March 2024 and is expected to see its revenue fall again in 2025.
Can the company finally make a turnaround under Pallia?
At least one brokerage proffered caution.
“Wipro has had multiple false starts under past CEOs. It needs to continue to deliver similar surprises (large deal wins like Phoenix) to lend credibility to the current turnaround effort,” said Kotak Institutional Equities analysts Kawaljeet Saluja, Sathishkumar S., and Vamshi Krishna, in a note dated 27 March.
Mint spoke with eight executives, including four current employees, to put together this piece.
Wipro did not respond to an email from Mint seeking clarifications.
Return from Paris
Let us take a step back and analyse some of Pallia’s decisions over the last year.
One of his first moves was human resources related. He promoted internal talent and prioritized internal leaders for top jobs. This contrasted with Delaporte’s approach—the Frenchman relied on external talent to head the company’s business arms.
Seven of the 10 business leaders appointed in the last year have been Wipro long-timers, with most of them being in the company for over a decade. All these leadership positions opened up after many senior executives appointed by Delaporte exited the company.
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“The good part is that Srini has not done too many things and has not tried to fix things that aren’t broken,” said an executive who has been with Wipro for over two decades. “Often, an incoming CEO tries to do too many things too quickly,” the executive, who didn’t want to be identified, added.
Under Delaporte, a culture of ‘old and new’ Wipro developed with the infusion of talent from other companies. The company’s older employees remained wary of losing their jobs. “Now, the fear factor of losing your job is no longer there,” said a second executive on condition of anonymity.
Second, Pallia has shown more restraint when it comes to splurging cash on inorganic moves. In the first two years of Delaporte’s stint, Wipro spent over $2 billion buying companies. Wipro has refrained from acquisitions in the last year, a trend expected to continue, executives said.
According to one analyst, the company is back to doing things from the past.
“Pallia has been more conservative and more focused on an internal Wipro agenda of rebuilding morale,” said Peter Bendor-Samuel, founder of Everest Group, a Dallas-based IT research company.
Another change was shedding the image of the Paris office (Delaporte’s legacy) as the company’s nerve centre. The company is beefing up its India leadership as it does not want unbilled executives stationed in client-facing locations such as Paris. Wipro’s office in the French city has now shifted to a smaller space with fewer than a dozen people working.
A new obsession
According to all the eight executives Mint spoke to, Pallia is “obsessed” with improving the company’s profitability.
This emphasis on improving margins through cost-cutting has permeated deeper. Executive travel plans have been put on hold or cancelled unless necessary. To this end, expensive team offsites held in marquee hotels across Dubai, London, and Paris are a thing of the past.
According to an internal email shared with employees and reviewed by Mint, the company might potentially eliminate at least 1,000 employees in the April-June 2025 period. This includes potential benefits of at least $4.28 million in cost savings, from business segments such as banking, financial services and insurance (BFSI), manufacturing, and utilities.
Under Delaporte, Wipro’s operating margin dived—from 19.1% in April-June 2020 to 16.4% by the end of March 2024. This fall of 270 basis points was the highest among its four larger peers. One basis point is a hundredth of a percentage point.
An analyst said Pallia’s cost-cutting measures have borne fruit. Indeed, he has improved the firm’s profitability (see chart).
“So far, the signs are positive. Spending pull-back on high-waged employees and external marketing are starting to help improve financials. This is proving especially timely with the current market crisis enveloping our industry,” said Phil Fersht, chief executive of HFS Research, a Massachusetts-based IT advisory firm.
Sales pitch
Over the last decade, Wipro’s compounded growth totalled 4.14%, half of its larger peers. TCS, Infosys, and HCL recorded a CAGR of 8.06%, 8.54%, and 9.43%, respectively. Even smaller rival Tech Mahindra reported a higher CAGR of 7.35% in this period.
The CEO, therefore, has his hands full.
Pallia’s most recent change was reorganizing the company’s business arms, which are called global business lines (GBL). The new business arms include Technology Services, Business Process Services, Consulting Services, and Engineering.
Pallia has taken a more hands-on approach to Wipro’s largest clients. He has appointed account executives for the company’s 80 largest clients, called ‘global account executives’. Additionally, 50 ‘must-have’ clients have been identified, and leaders in charge of the GBLs have been entrusted with acquiring these 50 accounts.
Wipro also prioritizes operating margins in its conversations with clients, as it does not want to sign deals below its operating margin goal of 17.5%.
One analyst summed up Pallia’s year at Wipro.
“Srini’s ascension was a back to basics and return to the roots transition. He is focused on results, rewards meritocracy, and is seen as a fair and technically competent leader. He has focused on big bets and profitable accounts,” said R ‘Ray’ Wang, chief executive of Constellation Research, a California-based tech research firm.
Tale of the long tail
Are all these measures enough to extract Wipro out from the quagmire?
The company faces many uncertainties.
One, it is unclear if Wipro is mining more business from existing clients. Two, there are concerns around Capco, the consulting firm Wipro bought for $1.45 billion in March 2021, its biggest acquisition.
“The new CEO has multiple challenges at hand—leadership retention, managing and growing the acquired consulting portfolio, and completing the long-unfinished turnaround journey,” Kotak analysts stated in a note dated 8 April last year. “The $1.45 billion acquisition of Capco was Thierry’s big bet. We don’t think that the acquisition has been fruitful and has realized synergies,” the note added.
It is unclear if Wipro is mining more business from existing clients. Two, there are concerns around Capco, the consulting firm Wipro bought for $1.45 billion in March 2021.
The company is looking to eliminate smaller accounts that are not contributing much to margins and growth, known in the IT industry as ‘cutting the long tail’.
However, according to an executive, in these times of economic uncertainty, when IT services companies pounce on every opportunity to win business, Wipro’s decision goes against the tide.
Moreover, because of Wipro’s continued underperformance for years, the company is the most vulnerable in the current macroeconomic environment. Global corporations may embark on vendor consolidation or reduce the number of their IT services partners.
Last month, New Jersey-headquartered Cognizant Technology Solutions Corp., which appointed a former Infosys executive as the CEO in January 2023, held its annual investor meeting. Two years after arresting a revenue decline, Cognizant is aiming big again. It wants to be counted among the world’s top four IT services companies—Accenture Plc, TCS, Capgemini SE, and Infosys—by 2026-27.
Many analysts and investors think Cognizant’s renewed aggression poses a challenge to homegrown IT firms, including laggards like Wipro.
“CTSH’s renewed focus on large and mega deals, coupled with a focus on driving productivity in technology through AI…and consolidating out vendors where possible, can increase the competitive intensity for Indian IT in the near to medium term, in our view,” Kotak analysts wrote in a note dated 27 March.
Six years, three CEOs
The changes Pallia makes, and its outcome, will determine chairperson Rishad Premji’s legacy.
Since taking over as the chair in July 2019, Wipro first saw Abidali Neemuchwala’s CEO stint being cut short, followed by Delaporte. Pallia is the third CEO in six years.
“Pallia’s success is critical to Rishad. Pallia faces a difficult task and must position Wipro for the emerging AI-driven market. These are big asks and he will need time to make the adjustments,” said Bendor-Samuel.
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Wipro’s public investors are anxious.
Between 6 April 2024 and 7 April 2025, the company’s shares were down 49.95%, the most among its top five peers. In the same period, TCS, Infosys, and HCLTech’s shares dipped 17.66%, 5.52%, and 11.01%, respectively.
Only Tech Mahindra saw its shares inch up by 2.03%.
To be sure, IT shares have been falling for the last few days after US President Donald Trump’s announcement of import tariffs. It has wiped off at least ₹81,220 crore in market cap for the big five IT outsourcers. India’s IT services sector may slow down in the year ahead as the tariff war threatens to hurt large clients in the US, analysts said.
Inflationary policies are expected to darken the mood further in the US. Wipro generates more than 60% of its business from the country—any disruption in the Americas can hit its revenue.
In the nine months ended December 2024, Wipro’s revenue declined 4.2% year-on-year to $7.78 billion.
Nonetheless, the actual test of Pallia’s success can be measured when there is macroeconomic stability, said analysts.
“The test for Srini Pallia would be how Wipro measures up against its peers when demand normalizes. He needs to put in place the blocks now, to see that Wipro starts running fast as soon as the demand picks up,” Nirmal Bang analysts Girish Pai and Suket Kothari wrote in a note dated 7 April last year, a day after the CEO change. “We think both investors and promoters would give him three years to deliver, though his tenure has been set at 5 years.”
Constellation’s Wang voiced a similar perspective, adding that challenges exist.
“Cost cutting has helped but the issue Wipro faces is bigger than the normal playbook. Services firms must be prepared for a world of exponential efficiency. You need to be 10x better or 10x cheaper to win new business. AI in a world of exponential efficiency is the key to getting back to double digit margins,” said Wang.
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