New Delhi, January 25: In an unprecedented move, Wipro’s founder Chairman Azim Premji replaced joint CEOs Suresh Vaswani and Girish Paranjape. TK Kurien, long time company insider has been appointed as the new CEO.
Industry analysts have characterized the move as “harsh” “aggressive” and “unprecedented”. Premji explained this move in terms of a structural re-haul rather than a reflection of the capabilities of the two ousted, stating that decisive leadership was the need of the hour.
The reactions from investors and the IT sector were however mixed after the change of guard was announced. Many see this new hire as an inevitable move to regain the ground that Wipro lost to its competitors especially TCS and Infosys whose operating margins during the global recession were close to 30%, against Wipro’s 22.2%.
Others see this move as creating further instability and possibly a mass exodus of employees as Wipro shares dropped by 4.59% to 456.05 after the new appointment was announced. IT analyst Kuldip Kaul from Motilal Oswal attributes Wipro’s failure largely to its turning down small-sized deals during the recession.
Wipro CFO Suresh Senapaty said the company intended a more balanced approach to recovery through a combination of small and big sized deals. The newly appointed CEO T K Kurien announced that the company would need to increase investments in fast growing segments like BFSI and healthcare. Analysts also expect a major turnaround as Wipro steps up its activity in sectors like telecom, retail and energy and utilities where Wipro has a sizeable revenue base.
–Agencies–