Nearshore Americas

Wipro Spins Off Non-IT Units to Focus on Outsourcing

India’s technology giant Wipro has decided to separate its IT outsourcing unit from other non-core businesses in an attempt to intensify its focus on outsourcing which accounted for 95 percent of the firm’s operating profit in last fiscal year.

“Creating a technology-focused company will allow us to better serve the needs of our customers, and accelerate investments necessary to capitalize on market growth opportunities,” said TK Kurien, CEO, IT business and executive director, Wipro Limited.

The other divisions will be brought under a single umbrella and will be named as Wipro Enterprises Limited. And Wipro Limited will remain a publicly listed company focusing exclusively on information technology.

“Wipro Enterprises Limited will be an unlisted company,” the Bangalore-based outsourcing company stated in a press release.

Wipro is India’s third largest outsourcing company. Last year, it appointed a new chief executive and restructured its operations. But its IT business does not seem to have recovered fully.

In Latin America, Wipro has delivery hubs in Curitiba, Brazil and Monterrey, Mexico.

The demerger will, however, have no impact on the management structure of Wipro Limited. Azim Premji, Wipro’s executive chairman, said the demerger will provide fresh momentum for growth.

The company has constituted a special committee to oversee the planning and execution of the demerger plan.

Citigroup Global Markets India Pvt. Ltd and J.M. Financial Institutional Securities Pvt. Ltd. are said to be advising Wipro on the demerger.

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Wipro entered the Indian market decades ago, launching with an edible sunflower oil [product. Soon it started selling a  wide range of consumer goods like furniture, soaps and detergents. But the real success came when the company began offering IT outsourcing services.

Staff Report

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