Tech Mahindra restructures after weak Q2 results
PUNE, INDIA — IT services firm Tech Mahindra is restructuring after disappointing Q2 results amid slowing demand. Starting in January 2024, the company will consolidate into 6 core units and appoint new regional leaders.
Tech Mahindra CEO Mohit Joshi explained that the restructuring consolidates the Americas business into 3 units, combines Europe telecom and non-telecom under one leader, and consolidates Asia Pacific and Japan under a single Australia-based head. India becomes a separate business unit.
The reorganization aims for more resilience and innovation in Tech Mahindra’s service offerings. But near-term headwinds persist in key markets like telecom.
Joshi said the changes aim to “streamline, focus, drive resilience, service line innovation, and margin improvement.” They also shift focus from geography-based delivery to vertical-wise delivery.
The weak Q2 results and restructuring reflect slowing demand, especially in Tech Mahindra’s 40% CME (communications, media, and entertainment) business. Joshi looks to diversify revenue into healthcare, financial services, and retail.
In Q2, Tech Mahindra’s net profit plunged 61.6% to Rs 494 crore (US$59 million) as revenue declined 2% to Rs 12,864 crore (US$1.55 billion). Operating margin also dropped significantly to 4.7%.
