Neemuchwala resigns after 4 years as Wipro CEO citing 'family commitments'

Abidali Z Neemuchwala
Abidali Neemuchwala has formally resigned after about four years as chief executive officer (and managing director since last July) at information technology major Wipro.

 His term had another year, but Neemuchwala has cited “family commitments” for wanting to leave. The board of directors  has begun the process of looking for the next CEO, the company told the stock exchanges. 

Rishad Premji took charge last year as executive chairman from his father, Azim Premji. "The board and I have a lot of respect for Abid and thank him for all his contributions over the past five years...he will continue to be the CEO and MD till a successor is appointed, to ensure a smooth transition," Rishad Premji wrote in an e-mail to employees after the quit announcement in the morning.

Neemuchwala joined Wipro as group president and chief operating officer in April 2015, from Tata Consultancy Services (TCS), where he was heading the BPM services division.

He was elevated as CEO in February 2016. Under his  charge, Wipro took various steps to realign its business operations for faster growth. 

Its West Asia business was restructured; the Indian business was reorganised by carving out a separate unit for state-run undertakings and government organisations, from the enterprise business. 

And, divesting its low-margin data centre business. While being affected by client-specific issues in the retail and health care divisions, Wipro has seen a fair amount of contract wins in the large deals space. In September 2018 came its largest-ever outsourcing contract, worth $1.5 billion, from Alight Solutions. A year after, it bagged a $300-million deal from ICICI Bank.

Yet, in recent years, growth was subdued as compared to peers. Revenue from IT services was nearly $7.6 billion in 2016-17 and $8.1 bn in 2018-19. 

This was a far cry from the earlier target of becoming a $15-bn entity, with operating margin of 23 per cent, by 2020.  During FY17-19, the operating margin also declined from 18.8 per cent to 17.9 per cent. 

However, the market capitalisation rose to $22.2 bn in FY19, from $19.3 bn in FY17.

Analysts, nevertheless, said Neemuchwala took all the right steps. 

“Given the macro headwinds and company-specific issues, Neemuchwala has given a strategic direction. His realignment efforts will definitely give dividends to the IT firm in the coming quarters,” said Pareekh Jain, an IT outsourcing advisor and founder of Pareekh Consulting. Bhaskar Ghosh of Accenture is seen as a strong contender as the next CEO.

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