Indian IT outsourcing major Wipro is planning to shut down its PC manufacturing in India. It will impact over 1,000 employees.
Times of India reported that Wipro is ramping down production at its PC manufacturing and assembly factories in Uttarakhand and Puducherry. The company is also shifting some of the employees in manufacturing division to other roles.
“The management has not conveyed specific announcement on manufacturing business, but the factory is at a standstill and fresh production is stopped,” said sources.
Recently, HCL Infosystems announced it would move away from PC manufacturing.
HCL Infosystems focuses on the IT services and hardware distribution businesses and that loss-making PC manufacturing would not be part of its future strategy.
Wipro’s hardware division, which makes laptops, desktops and servers, has seen falling profitability over the past several quarters.
Wipro officially announced that it will be discontinuing production of Wipro-branded desktops, laptops and servers after evaluating the changing market scenario and customer needs.
“Manufacturing our own PCs was not giving us a competitive differentiation in our System Integration solution offering,” said Soumitro Ghosh, senior vice president and head of Wipro Infotech.
In the September quarter, the unit had revenue of $150 million (Rs 930 crore), an increase of 4 percent over last year but the operating profit was 1.6 percent of sales. Industry analysts estimate that Wipro has a less than 2 percent share of the market.
“Wipro’s impending exit from hardware business and sharpening of focus towards value-added IT services business is the right strategy and will add to shareholder’s value creation,” said Jaideep Mehta, vice-president and country general manager at IDC India.
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