Wipro's senior leadership crisis deepens

Last Friday Wipro Ltd announced that its chief growth officer (CGO) Stephanie Trautman will be stepping down from her role, effective December 31, 2023. Based in the U.S. and a former Accenture executive, Staphanie led a team that was responsible for winning large client deals for the company.

Thierry Delaporte, CEO and managing director, says that changes were being made to the company's approach to large deals with the CGO being folded into Strategic Market Units (SMUs), which essentially would mean verticalization of large deals that the earlier horizontal approach. "Embedding this function within the SMUs allows us to build on the processes and approaches developed by the CGO and bring this experienced team closer to clients and on-the-ground sales teams. This integrated approach will help us uncover new growth opportunities, enhance our speed to market as well as success rate in deal wins," Delaport said in the statement.

Under Thierry's leadership, the company has seen departures of members from its executive teams including those of former CFO Jatin Dalal in September this year and earlier those of Anjan Guha, former Americas 2 SBU CEO, Rajan Kohli, former Managing Partner - iDEAS Business Line, Sanjeev Singh former COO. Stephanie who had joined the company in early 2021 was a part of the executive leadership steering Wipro growth direction. During the company's FY24 second quarter earnings, Thierry had dismissed that any of the exits will hurt growth and those just being a consequence of the new direction that the company is looking at. However, Wipro's numbers have been a sign of worry for its investors in comparison to its peers. Since the formation of the large deals team after Thierry took over the company, the total contract value of large deals in FY 22 stood at over $2.3billion with 37 large deals and in FY23 it was $3.9 billion with 55 large deals. In Q2 of Fy24 company stated its TCV at $1.3 billion. However, what has been elusive is mega-billion plus dollar deals like its peers Infosys and TCS in the past two years and even recently such as the TCS-JLR deal, Infosys with Liberty global. ICICI Securities in its note in October said, "The company's inability to translate its strong order book into revenues implies either higher levels of renewal component in signed large deals (>USD 30mn in size) or lack of significant presence in smaller-sized digital transformation deals where the velocity of revenue conversion is much higher."

What could be even more worrying for the investors is the outlook which remains grim. Wipro has guided for revenue growth for Q3 of FY24 to be in the range of -3.5% to -1.5% q-q in cc terms. Nomura in October 18th note said “ We think the weak guidance reflects demand headwinds and potentially higher-than-usual furloughs, particularly in the BFSI vertical. While Wipro management did not guide, it hinted at revenue decline to stop after 3Q FY24F as it expects the impact of furloughs to reverse in coming quarters. We lower our USD revenue growth estimate for FY24F by 280bp to -3.6% y-y."