Business

Wipro to sell Cornerstone OnDemand and Workday for $110 million to Alight

Finance written on paper with funding

Wipro was formed in 1945 by Mohammed Hashim Premji which started out as a vegetable manufacturer and also produced refined oil. The company then was known as Western India Vegetable Products Limited which abbreviated to Wipro. The company did not start out as an IT company at all, it was a vegetable company formed to provide vegetables to all of western India. It was not until Mohammed Hashim Premji died that the company moved its focus to IT.

Azim Premji was off to Stanford University when his father passed away. He came back and took over the company at the tender age of 21. It was not until 1980, almost 35 years into its existence that Wipro entered the IT domain. Wipro did not stop the expansion of its consumer products which were under the brands, Kisan, Sunflower, and Camel. That said, the company was later renamed to Wipro Limited. The IT expansion of Wipro was then started in 1980 and it has not looked back ever since. It is now a multinational company with a lot of credibility in the IT world.

The company recently bagged a deal of managing YouTube videos according to their guidelines. The numbers of Wipro aren’t bad either. As of 2018, the company’s revenue stood at $8.4 billion, the operating income and net income was at $1.57 billion and $1.23 billion respectively. The total assets of the company stand at $11.68 billion and the total equity is at $7.45 billion. This is the worth and enormity of this company.

That said, the company is planning to sell Workday and Cornerstone OnDemand to Alight for a $110 million price tag. A total of 350 employees who work in Workday and Cornerstone OnDemand business will move to Alight after the acquisition. The American company is focused on Human Resources solutions and Workday along with Cornerstone OnDemand have dedicated solutions when it comes to HR solutions.

The deal is yet to go through, however, the $100 million of the $110 million will be paid when the deal goes through. While the remainder of the $10 million will be paid over the next 12 months starting from the day the deal is closed.

Alight and Wipro landed an agreement. This agreement is a 10-year contract which will cost around $1.5 billion to $1.6 billion. “Following the closing of the 10-year agreement, previously announced in September 2018, Alight and Wipro continue to explore additional strategic opportunities and possible alignment of portfolios based on their respective strengths,” Wipro’s release statement read.

Wipro, however, will not lose its focus and will continue to grow its cloud applications. Abidali Neemuchwala, Chief Executive Officer of Wipro also talked about the same. He was quoted saying in the statement, “This agreement will enable Wipro to sharpen its focus on key offerings where it has a leadership position in the market. We will continue to make significant investments to grow our cloud applications and platforms business.”

-Unmesh Phule

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