Wipro appoints Neemuchwala as new CEO

Wipro appoints Neemuchwala as new CEO

Wipro appoints Neemuchwala as new CEO

Wipro, India’s third largest IT services company, on Monday put an end to rumours on its transitional journey by announcing Abidali Neemuchwala as the new Chief Executive Officer (CEO) and Member of the Board of the company.

Neemuchwala will be replacing TK Kurien, who has been elevated as Executive Vice Chairman, states Wipro in a regulatory filing. Neemuchwala will assume charge from February 1.

The company’s restructuring has happened at a time when the IT services companies in India are looking at leveraging the latest technologies like artifical intelligence, automation and data analytics. This is expected to strengthen its service offering in the digital or social, analytics, mobility and cloud platform spaces.

Neemuchwala, who quit as Tata Consultancy Services (TCS) BPO CEO after 23 years of service, was appointed by Wipro as its group president and chief operating officer (COO) with effect from April 1, 2015.

Wipro Chairman Azim Premji said, as Executive Vice Chairman, Kurien will enable Abid by leveraging his deep relationships with customers and chart out a new technology roadmap for the company.

“Over the past five years, Wipro has been transforming into a next generation technology and consulting company with defining differentiators in the market place,” Premji said, adding during his nine months stint as the Group President and Chief Operating Officer, Abid has effortlessly assimilated into the culture and ethos of Wipro.

“The new structure will ensure smooth succession and will build on the solid foundation we have developed to drive superior growth and profitability. I wish both TK and Abid every success in their new roles,” added Premji.

Kurien, who turns 58 next year, completes his five-year tenure as CEO this month, will continue to report to Premji. He will remain a Member of the Board until March 31, 2017. Kurein took over as the CEO from Girish Prajape and Suresh Vaswani, when Wipro decided to move away from dual CEO structure in Q3FY2011.

“Abid has demonstrated a deep understanding of technology, business vision, sound judgement, and an innate ability to bring people together. I have no doubt that Abid is the right leader to lead Wipro in its next phase of growth,” said T K Kurien.

“It is a privilege and an honour to be invited to lead Wipro, a company with a rich heritage of technology innovation and unflinching commitment to values. I am convinced that we are well positioned to seize new opportunities in today’s marketplace. I look forward to working with the thousands of Wiproites to take our company to greater heights," said Neemuchwala in a statement.

Wipro, with its strong workforce of 167,000 employees, under-performed its rivals and industry body Nasscom’s growth estimates. While  Wipro managed revenue growth of seven per cent in dollar terms, during the last fiscal ending March 2015, Wipro failed to register industry growth, as it registered only five per cent and 6.4 per cent in fiscal 2014 and 2013 respectively.

According to IDFC Securities Senior Vice President- Research Shashi Bhusan, TK Kurien’s tenure witnessed cient specific challenges which restricted momentum acceleration.

“There were many initiatives taken by TK to revive growth along with improving the sales process, implementing new management structure, and improving on internal IT. The company bagged many large deals over the last two years, but failed to accelerate growth due to client specific challenges,” said Bhusan.

India’s $146 billion outsourcing industry is going through a turbulent phase amid growing pricing pressure as commoditised outsourcing slashing the margins of companies.

Bhushan points out that after Neemuchwala’s appointment, he has taken multiple initiatives to drive operational efficiency and automation. “He hired Ankur Prakash (Head Emerging Market), David D’Lima (Integrated Services and Solutions), and Dave Chopra (Head Global Infrastructure Services) from TCS to strengthen processes and improve client mining,” he said.

Bhushan said he expects management reshuffle again at Wipro after Abid Ali takes over as its CEO. “We see churn could de-rail the recovery. However, pedestrian valuation (at 13.5x FY2017 estimate) with high single digit revenue growth (in USD terms) would restrict significant downside from the current level,” he said.