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Bangalore 'stagnating', Wipro to spread wings

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July 24, 2004 09:38 IST

Wipro Ltd, after witnessing an increase in attrition and on the lack of good infrastructure that has resulted in increased commuting time for its employees, is now looking at growth beyond Bangalore. Currently, Wipro has 11,000 employees in Bangalore alone.

"Bangalore is a zero-sum game. In terms of infrastructure, there has not been any material improvement in the last five years. As a result, it is becoming difficult to sustain growth here. As part of our retention management, we want to move for an incremental growth outside Bangalore as much as possible," Vivek Paul, vice-chairman, said.

Centres that will receive increased focus include Hyderabad, Chennai, Pune, Gurgaon, Powai, Kolkata and Kochi.

According to Azim H Premji, chairman, "We are starting our operations in Kolkata from next month. We will start with taking new accounts as well as shifting some existing accounts to this centre.

"We are going to be setting up centres outside Bangalore rapidly as we go along. The key reasons include increased commuting time and high attrition.

"Qualified engineers and graduates are coming up in other cities and states. We will take our business wherever there is opportunity for our employees. The reality is that there is opportunity outside Karnataka and outside Bangalore. We have to be present where talent is available and infrastructure is superior."

Wipro feels that expanding to other cities will help it to reduce attrition and also manage increasing wage pressures.

The company factored a wage pressure in the range of 15-18 per cent in its first quarter results. It is yet to finalise the wage increase for the IT business for the current fiscal.

"However, one way to compensate wages is by hiring younger engineers so that the average wage bill continues to be contained," Paul said.

Wipro hired 3015 people during the first quarter, taking its total headcount to 31,517 by the end of June 30, 2004, including 20,768 engineers in the IT services business and 10,749 people in IT-enabled services.