IT major Wipro is planning to lay off hundreds of mid-level onsite employees, in a bid to improve its margins, according to reports. This comes as the company is facing growth challenges and lagging peers in the market downturn.

The intimations were sent to employees early January. Wipro’s onsite resources in Capco are extremely costly, and while growth is returning, it is still insufficient. The goal for CFO Aparna Iyer is to demonstrate higher margins this quarter, a news publication reported.

Out of the four biggest IT services businesses listed in India, Wipro has the lowest margins. Its margin for the December quarter was 16 per cent; while HCL Technologies, Infosys, and Tata Consultancy Services posted margins of 19.8 per cent, 20.5 per cent, and 25 per cent, respectively.

Reports also suggest that the job cuts are a part of ‘Left-Shift’ strategy, where a level 2 employee receives the tasks of a level 3 employee and is provided with the necessary tools. The notion is that the work of a Level 1 employee is automated, and a level 1 person completes the level 2 task.

The company under Thierry Delaporte, acquired Capco for $1.45 billion in 2021, its biggest acquisition. The performance of the acquisition has been under the radar, as it was majorly affected by reduction in discretionary spends triggered by slowdown in western economies.

Responding to a businessline questionnaire a company spokesperson said “We are committed to investing in our people, processes, and technology to drive better client and employee experiences and enhance productivity and agility across our organization to meet fast-evolving client and market needs.”

Aligning our business and talent to the changing market environment is a critical part of our strategy as we look to build a resilient, agile, and high-performance organization, the spokesperson added.