The speculation in India's tech circles had been rife for months. Vivek Paul, vice-chairman and CEO of Wipro Technologies (WIT), India's premier tech-services company, was said to be planning to quit.
Although Paul and Wipro remained silent, rumors flared last fall when he sold $7 million worth of Wipro shares -- 90% of his stake in the company. Then on June 28, as departure speculation surged again, Wipro's New York-traded American depositary receipts dropped 4%. Finally, early on June 30, the company confirmed the story: Paul would leave Wipro -- the second top exec to resign in a month.
LITTLE PROSPECT FOR ADVANCEMENT. What's up at Wipro? Paul says that he's leaving on good terms and that he wants to do more work in tech and life sciences -- which he says he'll be able to do at private equity firm Texas Pacific Group, where he has signed on as a partner.
Meanwhile, Raman Roy, who quit his position leading Wipro's call-center business in early June, said he left to start his own business, but gave no further details. A report by Lehman Brothers on June 28 suggests the exits are the result of "the high level of ownership and control by the chairman," Azim Premji, who owns 84% of Wipro's shares.
Premji is certainly a taskmaster who likes to keep his finger on the pulse of the business. His house stands next door to Wipro's sprawling campus in Bangalore, and he's often the first one in the office in the morning and the last out at night. He is a tightfisted manager who monitors the office supplies used at the company and makes random checks to see that workers turn off the lights at the end of the day. The 60-year-old chairman also shows no signs of slowing down, leaving little prospect for advancement for an ambitious No.2. Premji declined to comment.
Paul's departure will leave a vacuum. The hard-charging former General Electric (GE) executive joined Wipro in 1999 and helped build the Indian company from a $150 million software-services provider into a $1.4 billion powerhouse whose 41,000 employees offer a range of tech and back-office services. "It's the perfect time for me to go, as Wipro's brand is globally established," Paul said in a telephone interview from Wipro's U.S. headquarters in Mountain View, Calif., where he is based.
"SHOW MUST GO ON." Within the company, Paul is admired for bringing in discipline and GE-style processes during his six-year tenure. And as India's tech prowess has grown, the well-spoken Paul has been "one of our best ambassadors," says Sunil Mehta, vice-president of Nasscom, India's tech industry association.
Investors are wondering what will become of the company with Paul gone. "Vivek Paul was Wipro's top salesman," says Manoj Singla, an analyst at J.P. Morgan in Bombay, who predicts that the company could have trouble getting new customers after Paul's departure.
But Paul says he is leaving Wipro with strong management in place: "Part of my legacy is that the show must go on." A June 28 report by Morgan predicts Wipro's growth won't suffer, estimating revenues of $2.4 billion for the year ending next March, and $3.1 billion in the following year. Wipro has "a deep bench," says Joe Fernandes, managing director of Everest Research Institute, a market researcher that studies info-tech services.
SEAT WARMER OR GLOBAL PUSH? So far, Wipro is mum on who will replace Paul. Rumors are again flying, with some predicting that Premji will appoint someone to warm the chair until his 27-year-old son, Rishad -- just graduated from Harvard Business School and going to work for consultant Bain & Co. in London -- is ready for the top job.
Others speculate that he might poach from a foreign tech-services rival and make Wipro truly global. The company needs "someone who can see where to take the next step of outsourcing," says Ashok Soota, a former vice-chairman of Wipro who now runs his own tech shop, Mind Tree Consulting. In any case, whoever replaces Paul will have some mighty big shoes to fill. By Manjeet Kripalani in Bombay, with Steve Hamm in New York