Wipro CEO and managing director Abidali Z Neemuchwala has decided to step down from the company on account of family commitments, the Bengaluru headquartered information technology (IT) services company said in a filing with the stock exchanges on Friday.
The company said it had initiated the process of identifying a new CEO. Neemuchwala will continue to remain in charge as CEO and managing director until a replacement is found, it said in the fling.
"lt has been my honour and privilege to serve Wipro, a company with a rich legacy of almost 75 years. We have made considerable progress in our transformation journey, improved our delivery engine and institutionalised deeper client centricity. I thank Azim Premji, Rishad, our board of directors, my colleagues and customers for their support over the years." Abidali Z Neemuchwala, CEO and managing director said in a statement.
While Neeuchwala will continue to hold the position until a successor is found, his departure is an unexpected setback for the company that has been trying hard to break out of the secular growth path the company has fallen into.
“Over the last three years, the company’s operational metrics have improved despite the company facing multiple headwinds in the top three verticals of the company like financial services, retail and oil and gas,” Sanjeev Hota, vice president and head of research at brokerage firm Sharekhan told TechCircle.
To find a CEO for an $8 billion company is always going to be a challenge though this may not have an impact on its topline or profits, analysts said, adding that only a longer transition could hurt the firm.
The secular growth rate of Wipro that lagged the other top tier IT firms has caused the company to fall behind Noida-based HCL Technologies in revenues recently. In fact, the market expectations have been set so low that the company has the lowest valuation for its earnings at the stock exchanges among big IT firms.
An even more worrying factor for the firm is that a new CEO’s priority would be stabilisation and moving in the right direction before taking any aggressive growth strategies, Hota said adding that such measures can be risky and need not necessarily provide positive results.
“This is a completely surprising move. This may be an opportune moment to bring a more dynamic managing director who can enhance performance to make it grow at least as fast as its peers,” said Shriram Subramanian, founder of Bengaluru based corporate governance and advisory firm InGovern.
However, Wipro has undergone some significant cultural changes in the last few years to become a more consultative led, outcome-centric organisation, said Gartner analyst DD Mishra adding that he does not foresee a change in strategy because of the leadership change.
“This aligns well with the current requirements of the business and trends in global markets. The change can be an opportunity for Wipro to further their digital transformation mission under new leadership, with new vigour,” Mishra added.
Abidali has been the CEO and managing director of Wipro since February 2016.
"We thank Abid for his leadership and his contributions to Wipro. Over the last four years, Abid helped build a strong execution mindset, drove key acquisitions and scaled our Digital business globally. We wish him the very best for the future." Rishad Premji, Chairman of Wipro said. Premji himself took over the reins as executive chairman from his father and Wipro founder Azim Premji last year.