Protests force Wipro to reconsider closure of French R&D unit

Indian IT services provider Wipro is reportedly reconsidering its plan to close a research and development (R&D) centre at Sophia Antipolis in the south of France following employee protests and opposition from local government officials.

Wipro acquired the centre when it bought Austrian semiconductor development company NewLogic Technologies in 2005. The centre employs around 60 people and specialisises in Bluetooth and RFID technology.

In a recent interview with electronics industry paper EE Times, the chief executive of Wipro’s French division said that the Sophia Antipolis centre was already “not extremely robust and blooming” when it changed hands in 2005, and that the revenue Wipro earns from its intellectual property relating to semiconductors has plummeted in recent years.

“We have tried all we could and put in place all we could imagine to have a perpetual and profitable activity,” said Christophe Martinoli. ”Eventually, these initiatives haven’t led to very convincing results.”

Earlier this month, local officials including mayor Marc Daunis held a press conference at Wipro-NewLogic’s premises, criticising the company’s decision to close the unit.

“We are facing the pillaging of intelligence in a company that makes profits, is in a sane situation but finds its profitability unsatisfactory,” said Daunis. "This company, however, does not hesitate to receive, through the French research tax credit, state-aid amounting to tens of millions [of] Euros. I now send a message for all players to mobilise, starting with the French State."

Wipro executives have told newspapers that they are once again trying to find a potential buyer for the unit. However, its chances of doing that – having identified the research centre as unprofitable – seem slim.

The episode exemplifies the clash of business cultures between India and France. That the fate of just 60 employees might attract so much attention may come as a surprise to Wipro, which employs around 100,000 people. This time last year the company cut 1,000 jobs on its home soil without much in the way of complaint. “It’s a regular annual exercise,” a Wipro executive said at the time.

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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