BENGALURU: Wipro’s revenue declined 2. 8% sequentially in the June quarter. Year-on-year revenue growth was also weak in comparison to peers. In an interaction with TOI, Wipro CEO Thierry Delaporte said that in almost every industry, businesses have been reducing discretionary spends amid the weak macro environment. Excerpts:
Wipro continues to lagpeers. Does it reflect a higher exposure to consulting business?
There’s been a slowdown over the last three quarters. While we continue to have a great volume of larger deals, the discretionary spending of small engagements has reduced. So, we are showing a revenue decline now. But look at the numbers from the market. They are all showing a similar trend. We have 14-15% of our business in consulting, and we are very happy with this business. That will certainly be the first one to bounce back. Banking and tech together is almost 50% of our business, they are high spenders in technology, and they have certainly reduced dramatically their discretionary spend over the last few quarters. All I know is that we have not lost large accounts.
And I don’t think we are losing market share in the accounts where we are in. Capco and Rizing – one focuses on BFSI, the other on SAP consulting — those businesses were acquired for strategic reasons. They tend to not see growth now because a lot of these smaller projects, when they need to reduce their spend, they look at the consulting fees to start with.
How do you see the problems in banking sector?
For the last 6-9 months, there has been a significant slowdown. I’m not seeing signs of further degradation. In the beginning of the year, when the crisis happened, when the Credit Suisse, UBS deal happened, that drove a little bit of anxiety and leaders certainly decided to stop some of their spend. I think we are still in this market of uncertainty. But I would say the problem is more in America than in Europe or in Asia.
Rishad Premji said you have the full support of the board and himself. Wipro has struggled to get back on the growth track. Would you look at some business aspects with a fresh lens?
Honestly, we are not changing anything in the strategy. We are accelerating our transformation and continue to invest more in our own operational excellence. We are making a big commitment to our position as an absolute leader in the AI space. We are very happy and satisfied with where we are. I heard what Rishad saidand that’s how
I’ve always felt for the last three years. We have a great board and a great chairman, who is close to the business and supportive of what we are doing and completely on board with our strategy. And we are executing on it. Rishad and I are engaging constantly, and we were together during the weekend. And I really like the fluidity and the simplicity and the transparency in the way we work together.
Wipro’s addition of employees declined by 9,000. Is this a reflection of demand, or is it because of efficiencies brought in by AI?
I think there will be less of a connection in future between revenue and headcount, but it doesn’t mean that we will shrink. We’ll continue to grow. Our focus over the last year around talent remains. We are going to train every single employee of Wipro in the next 12 months on AI because they need to understand and reflect onit. AI will be a fabulous enabler and will be a way to enhance productivity so that those talent pools of associates will be able to have a bigger impact and contribute more to true value services to our clients. You should look at the headcount evolution over a longer period. There have been quarters where we’ve made significant innovative investment, onboarding a lot of young associates. We are removing layers when that is not necessary, and technology allows people to do more work. I think the efficiency is certainly allowing us to streamline our organisation.
For Indian IT, AI, at some point, would be mainstreamed. Would 10-15% of the workforce be redundant?
If we don’t train them, yes. If we train them and they understand how to leverage AI, they will contribute and deliver higher value services. Keep in mind we are also in an economy where talent is a currency.
Wipro continues to lagpeers. Does it reflect a higher exposure to consulting business?
There’s been a slowdown over the last three quarters. While we continue to have a great volume of larger deals, the discretionary spending of small engagements has reduced. So, we are showing a revenue decline now. But look at the numbers from the market. They are all showing a similar trend. We have 14-15% of our business in consulting, and we are very happy with this business. That will certainly be the first one to bounce back. Banking and tech together is almost 50% of our business, they are high spenders in technology, and they have certainly reduced dramatically their discretionary spend over the last few quarters. All I know is that we have not lost large accounts.
And I don’t think we are losing market share in the accounts where we are in. Capco and Rizing – one focuses on BFSI, the other on SAP consulting — those businesses were acquired for strategic reasons. They tend to not see growth now because a lot of these smaller projects, when they need to reduce their spend, they look at the consulting fees to start with.
How do you see the problems in banking sector?
For the last 6-9 months, there has been a significant slowdown. I’m not seeing signs of further degradation. In the beginning of the year, when the crisis happened, when the Credit Suisse, UBS deal happened, that drove a little bit of anxiety and leaders certainly decided to stop some of their spend. I think we are still in this market of uncertainty. But I would say the problem is more in America than in Europe or in Asia.
Rishad Premji said you have the full support of the board and himself. Wipro has struggled to get back on the growth track. Would you look at some business aspects with a fresh lens?
Honestly, we are not changing anything in the strategy. We are accelerating our transformation and continue to invest more in our own operational excellence. We are making a big commitment to our position as an absolute leader in the AI space. We are very happy and satisfied with where we are. I heard what Rishad saidand that’s how
I’ve always felt for the last three years. We have a great board and a great chairman, who is close to the business and supportive of what we are doing and completely on board with our strategy. And we are executing on it. Rishad and I are engaging constantly, and we were together during the weekend. And I really like the fluidity and the simplicity and the transparency in the way we work together.
Wipro’s addition of employees declined by 9,000. Is this a reflection of demand, or is it because of efficiencies brought in by AI?
I think there will be less of a connection in future between revenue and headcount, but it doesn’t mean that we will shrink. We’ll continue to grow. Our focus over the last year around talent remains. We are going to train every single employee of Wipro in the next 12 months on AI because they need to understand and reflect onit. AI will be a fabulous enabler and will be a way to enhance productivity so that those talent pools of associates will be able to have a bigger impact and contribute more to true value services to our clients. You should look at the headcount evolution over a longer period. There have been quarters where we’ve made significant innovative investment, onboarding a lot of young associates. We are removing layers when that is not necessary, and technology allows people to do more work. I think the efficiency is certainly allowing us to streamline our organisation.
For Indian IT, AI, at some point, would be mainstreamed. Would 10-15% of the workforce be redundant?
If we don’t train them, yes. If we train them and they understand how to leverage AI, they will contribute and deliver higher value services. Keep in mind we are also in an economy where talent is a currency.
