Wipro  plans layoffs of mid level onsite employees to boost margins

Indian IT major Wipro is reportedly set to lay off hundreds of mid-level onsite employees as part of its strategy to enhance margins. 

Facing growth challenges and trailing behind peers in the market, Wipro aims to improve its financial performance. The decision follows intimations sent to employees in early January, with a focus on the company’s onsite resources in Capco, which are deemed costly. CFO Aparna Iyer’s goal is to demonstrate higher margins in the current quarter.

Wipro currently lags in terms of margins among the four largest IT services companies in India, with a margin of 16% for the December quarter. In comparison, HCL Technologies, Infosys, and Tata Consultancy Services reported margins of 19.8%, 20.5%, and 25%, respectively. 

Reports suggest that these layoffs are part of Wipro’s ‘Left-Shift’ strategy, where tasks of a level 3 employee are assigned to a level 2 employee, with automation handling level 1 tasks.

The company, under the leadership of Thierry Delaporte, acquired Capco for $1.45 billion in 2021, marking its largest acquisition. However, the performance of the acquisition has been impacted by a reduction in discretionary spending, influenced by a slowdown in Western economies. 

Wipro emphasizes its commitment to investing in people, processes, and technology to enhance client and employee experiences, aligning its business and talent with the changing market environment.