Why Thierry Delaporte resigned as Wipro’s CEO

Welcome to Top of the Morning by Mint, your weekday newscast that brings you five major stories from the world of business. It's Monday, April 8, 2024. My name is Nelson John. Let's get started: Just as India’s 245 billion dollar IT industry prepares for its earnings season, a high level exit has shook the industry. Bengaluru-based Wipro’s CEO and managing director Thierry Delaporte put down his papers late on Saturday. People aware of the matter told Mint’s Varun Sood that the real reason behind the Frenchman’s exit was a phone call from Wipro chairman Rishad Premji. Despite expectations of a stagnant performance for April to October, Delaporte expressed optimism for the latter half of FY25 to company chairman Rishad Premji. However, internal projections remain undisclosed as Wipro, India's fourth-largest IT firm, braces for a potential revenue dip in its upcoming April 19 earnings report. Delaporte was expected to complete his five-year term in July next year. However, to his surprise, the Wipro chairman declined to offer him a second term. On Saturday evening at 7:13 PM, Wipro announced a significant leadership change, appointing Srini Pallia as its new CEO, making him the company's eighth CEO since 2000.  Thierry Delaporte’s departure from Wipro’s C-suite follows a larger trend of expat CEOs finding it difficult to work in Indian IT boardrooms. Beyond the straightforward management of profit and loss, these leaders often grapple with cultural disparities that can significantly impact their effectiveness. Some of the Indian IT firms have ventured to appoint expat CEOs over the past few years. Notable names include Vishal Sikka - a US citizen - at Infosys, Brian Humphries at Cognizant, and Delaporte at Wipro, all of whom eventually parted ways with their respective companies under less than ideal circumstances. Mint’s Shelley Singh takes a look at the reasons behind the quick exits and temporary tenures of expat CEOs in Indian IT companies. Shelley writes that the primary issue lies in cultural integration. Expat CEOs often find it challenging to bridge the gap between Indian employees and a diverse client base, leading to a disconnect that adversely affects business operations.  Last month Prime Minister Narendra Modi along with information and technology minister Ashwini Vaishnaw presented the first national creators awards. Winners included popular YouTubers, Instagram influencers and other social media celebrities. The move came right before elections, underscoring the government’s attempt to woo young voters between the age of 18 and 29 - the generation of ‘digital natives’, which will have a significant role to play in the upcoming elections. Turns out the ruling party isn't the only one trying to cash in on the popularity of internet influencers. With the 2024 Lok Sabha elections just around the corner, parties are aggressively adopting digital strategies to captivate the young, tech-savvy electorate. They are embracing artificial intelligence, podcasts, social media influencers, and even virtual reality. This election marks a significant departure from traditional campaigning methods, aiming to resonate with young Millennial and GenZ voters. Mint’s media correspondent Lata Jha spoke to several industry insiders who shed light on the shift in how political parties are electioneering. While billboards and outdoor advertising remain in play, particularly in tier-II and tier-III cities, the digital realm is where the battle for attention is most intense. According to Rajni Daswani of SoCheers, digital advertising is saturating tier-I cities, with political leaders engaging with key influencers. Meanwhile, traditional media maintains its grip on smaller cities, tailored to local narratives. The use of AI stands out, with innovative applications like AI-generated speeches of late leaders to appeal to voters, and translation services breaking language barriers to reach a broader audience. In September 2019, Sunil D’Souza, then managing director of Whirlpool India, was approached by Egon Zehnder for the CEO position at Tata Global Beverages, the beverage division of the Tata Group. Despite initial hesitations due to the conglomerate's scattered FMCG presence, a vision laid out by Natarajan Chandrasekaran, chairman of the Tata Group, convinced him to take on the challenge of streamlining and expanding the group's consumer goods sector. In December 2019, D’Souza was appointed managing director and CEO, transitioning the company into Tata Consumer Products Ltd (TCPL) by February 2020. Under his leadership, TCPL has seen significant growth, with revenue climbing to 13,783 crores rupees in 2022-23, an 11 per cent increase from the previous year, and profits soaring by 30 per cent to 1,320 crore rupees. The company's share price has also seen a remarkable surge, increasing by over three and a half times since December 2019. D’Souza's strategic moves have diversified TCPL's portfolio beyond beverages to include a variety of food products and household staples, challenging competitors across the FMCG sector. Mint’s FMCG correspondent Suneera Tandon tells the story of how D’Souza took the Tata group company to new heights and what his plans are for the future. Did you know India was one of the first developing countries in the world to introduce  the concept of a minimum wage? India introduced minimum wages  in 1948, soon after gaining independence. Now, the country is on the cusp of transitioning from a minimum wage system to a living wage model. Aiming to ensure that workers and their families can afford a basic yet dignified standard of living, the government is planning to introduce living wages by 2025. But what are living wages? How will they benefit workers and what are the challenges that the government could face? Tina Edwin, Mint’s contributing editor, explains. A living wage, for one, exceeds the minimum wage by encompassing the cost of a decent standard of living, including food, housing, education, healthcare, and other essentials. It's calculated based on the economic situation of a specific region, reflecting the actual needs of a worker's household. Unlike the one-size-fits-all approach of minimum wages, living wages consider the varying cost of living across different states and even districts, arguably making it a more equitable standard of remuneration.   We'd love to hear your feedback on this podcast. Let us know by writing to us at [email protected]. You may send us feedback, tips or anything that you feel we should be covering from your vantage point in the world of business and finance. A phone call, a discussion, and a firing: Behind Delaporte's Wipro exit Expat exits: Why foreign-born CEOs don’t last the distance in Indian IT firms When voters turn tech-savvy, can political parties be far behind Beyond tea and salt: How Sunil D’Souza plans to spice up Tata’s FMCG pie Mint Explainer: How workers will benefit from living wages Learn more about your ad choices. Visit megaphone.fm/adchoices