In a recent judgment, the Delhi high court directed Wipro to pay Rs 2 lakh in damages to a former employee over defamatory statements made in his relieving letter. The court also instructed the company to issue a new letter, removing the remarks that harmed the employee’s professional reputation and character, a TOI report stated.
Former employee challenged content of termination letter
The former employee had worked as a principal consultant at Wipro from March 14, 2018, to June 5, 2020. After his departure, the company issued a relieving letter which described his conduct as “malicious” and claimed that his actions led to an “irreparable breakdown in the employer-employee relationship,” according to the court order.
Aggrieved by the content, the ex-employee approached the court seeking removal of the defamatory remarks and issuance of a clean termination letter.
Court rules in favour of professional dignity
The high court held that the content in the letter caused reputational harm, emotional distress, and a loss of professional credibility to the petitioner. It stated that allowing such remarks to remain on record would unfairly damage the individual’s professional prospects.
The court said, “Issuance of a fresh letter and expungement of remarks shall not alter the decision of termination of the petitioner in any manner.”
Wipro directed to remove defamatory statements
The court ordered Wipro to remove all such remarks related to the employee’s professional character and to issue a fresh termination letter without any defamatory content. The original letter will now hold no effect with respect to the defamatory parts.
The Rs 2 lakh awarded by the court is to be treated as general compensatory damages.
Wipro faces revenue and margin pressure in June quarter
Meanwhile, during the June quarter, Wipro recorded a 2.3% drop in revenue in constant currency terms. The decline, however, remained within the company’s forecast range of –3.5% to –1.5%. The firm attributed the muted performance to a slowdown in client spending amid economic uncertainty.
CEO highlights focus on AI and cost optimisation
Wipro CEO Srini Pallia noted that clients remained cautious with discretionary spending and were instead focusing on initiatives with immediate returns. “Our clients prioritised initiatives with immediate impact, focusing on cost optimisation and vendor consolidation. At the same time, they accelerated their AI, data, and modernisation programs,” Pallia said.
Operating margins dip sequentially, but show annual improvement
Wipro’s operating margin declined slightly to 17.3% in Q1 from 17.5% in the previous quarter. However, this reflected an 80-basis-point increase compared to the same quarter last year. CFO Aparna Iyer explained that the flat utilisation and currency impact were balanced out by cost savings and operational efficiencies.
Strong deal momentum despite revenue pressure
Despite the revenue decline, Wipro secured strong deal wins during the quarter. The total contract value stood at $5 billion, marking a 50.7% rise over the previous year. Of this, $2.7 billion came from large deals, more than doubling compared to last year. Execution of these projects is expected to stretch over the next 6–8 quarters.
Geographically, Wipro reported 1.5% growth in constant currency from the Americas, while revenue in APMEA remained stable, supported by digital spending. Europe remained weak due to continued cost pressures, Pallia said, though the banking and financial services segment saw steady demand.
Muted hiring and modest guidance for next quarter
Wipro expects flat to marginally negative revenue growth in the September quarter, guiding for a range of -1% to 1% in constant currency. The company’s headcount dropped by 114 during the June quarter, ending with 233,232 employees.