BENGALURU: The fourth-largest IT services company Wipro on Wednesday reported a marginal drop in both its second-quarter net profit and revenue amid economic weakness and lower discretionary spends by clients. It missed Street estimates and reported 0.47% year-on-year decrease in net profit at Rs 2,646.3 crore compared to Rs 2,659 crore in the same quarter last year. Sequentially, its net profit was down by 7.8%.
The company’s second quarter revenues too decreased as the company reported Rs 22,516 crore revenue from operations, a decrease of 0.1% from Rs 22,539.7 crore it reported a year-ago. Operating margin for the quarter stood at 16.1%. For the upcoming third quarter (Q3), Wipro expects its revenue from the IT services business segment to be in the range of $2,617 million to $2,672 million. This is a decline ranging from -3.5% to -1.5% in constant currency terms.
“We are winning in the market against the backdrop of economic weakness. The business environment has been uncertain and inflation has stayed high... Lower discretionary spending is reality today and conversion of order booking has become slower,” Thierry Delaporte, chief executive officer and managing director, Wipro, said. Clients are continuing to take a much more rigorous look at their investments. However, the company is witnessing a surge in active generative AI projects.
Talking about the company’s ai360 strategy, the CEO said since their announcement last quarter, they have trained 180,000 employees in basic Gen AI principles. “We are very rapidly integrating Gen Ai into our processes, solutions and offerings. Our teams are seeing significant productivity gains by using AI,” he said. Delaporte added that Gen AI is being used in marketing for content generation and translation and in the HR function for candidate background verification.
Also, on Wednesday, the company announced that the Board of Directors has given the approval for the merger of five units - Wipro HR Services, Wipro Overseas IT Services, Wipro Technology Product Services, Wipro Trademarks Holding Limited and Wipro VLSI Design Services India Private Limited- with itself. Like its rivals, Wipro is also reducing its headcount, and this quarter, the IT services company saw a decline of 5,051 employees compared to the previous quarter. Attrition on a last-twelve-month basis stood at 15.5%. As far as campus hiring is concerned, Chief Human Resources Officer Saurabh Govil said they would first honour all offers they have already made. Wipro also plans to pay 80% variable pay to employees.
