Wipro appoints Kurien as CEO; Paranjpe, Vaswani steps down

India's No. 3 software services exporter Wipro replaced the chiefs of its key outsourcing business and reported third-quarter profit growth that lagged its main rivals.

 
Bangalore: India's No. 3 software services exporter Wipro replaced the chiefs of its key outsourcing business and reported third-quarter profit growth that lagged its main rivals.

Wipro said company veteran T K Kurien was taking over as the new chief executive of the IT unit, which accounts for about three-quarters of its revenue, to make the organisation structure simpler.

Analysts said Wipro, which posted a 10 percent rise in third quarter net profit on Friday, had been struggling to keep up with its bigger competitors, Tata Consultancy and Infosys.

"Wipro has been underperforming both TCS and Infosys for the last five to six quarters," said Hardik Shah, IT sector analyst at brokerage KR Choksey Shares & Securities.

"Something was wrong, things were not quite working out and this (the management change) seems to be a drastic step," he said. "It will take a couple of quarters at least for the new strategy to come through. There should be some uncertainty till then."

"This is definitely a surprise," said R.K. Gupta, managing director of Tarus Mutual Fund, which owns Wipro shares. "For Wipro, resignations by such key people could lead to losing out on some orders as the contacts move away with the employees."

This week has seen a management shakeup in global technology. Hewlett Packard Co is restructuring its board, criticized by many as dysfunctional, Google's co-founder Larry Page will take over as CEO and Apple's visionary CEO Steve Jobs has announced a leave of absence.

Wipro is led by Chairman Azim Premji, the world's 24th richest billionaire according to Forbes and termed "India's Bill Gates" by the magazine.

Premji took over his father's ailing vegetable oil business in the mid-1960s leaving his degree in engineering at Stanford unfinished. He diversified into making hydraulic cylinders in the 1970s and struck out into information technology in 1980.

"The joint CEO structure was one of the key factors that successfully helped us navigate the worst economic crisis of our times," Premji, said in a statement. "With the change in environment, there is a need for a simpler organisation structure."
 
Bureau Report

 

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