Bengaluru, Jan. 21: In a surprise move, Wipro on Friday announced that Mr Girish Paranjpe and Mr Suresh Vaswani, joint CEOs of the IT business, have decided to step down from their responsibilities effective February 1, 2011.
They will be replaced by Mr T. K. Kurien, who takes over as the CEO of the IT business and executive director of the company. The change at the top comes in the wake of the company’s poor performance compared to its peers TCS and Infosys for the past few quarters.
Wipro posted lower-than-expected growth in quarterly profit by just 10 per cent to `1,318.8 crore. Total revenue rose by 12 per cent to `7,829 crore vis-a-vis the same period last year.
Admitting that the company had underperformed in third quarter relative to its competitors, Mr Azim Premji, the chairman of Wipro, said, “I don’t think we should make excuses about our performance. We have a relatively smaller exposure to the financial services and healthcare sectors compared to our peers, who have over 40-50 per cent exposure to these sectors and have benefited from the extremely high turbo-charged growth in these two sectors.”
A senior executive who was present at the top management briefing, told this newspaper, “The decision to resign was taken on January 19 and presented for approval at the Board meeting on Thursday. We were informed about the decision only this morning. Both Mr Girish and Mr Suresh have spent over 20 years in Wipro and their combined expertise contributed to maximise profit expansion during the months following the economic downturn.
Asked about their future plans, Mr Girish said, ‘I might become a hermit and Suresh may become a playboy.” The joint CEOs also happen to be Wipro’s most highly paid executives — 50-year-old Vaswani’s total compensation for 2010 is $659,134 and 52-year-old Paranjpe’s compensation for 2010 is $470,405.
Commenting on the change, Mr Premji said: “The joint CEO structure was one of the key factors that helped us navigate the economic crisis. With the change in environment, there is a need for a simpler organisation structure.” Girish and Suresh will work together with Kurien till March 31, 2011 to ensure a smooth transition.