India's largest staffing firm Quess Corp's Group CEO and board member Suraj Moraje is likely to step down, less than two years after his appointment, four people familiar with the development told Moneycontrol.
His exit will be announced after the company's board meeting on February 10, the persons said, adding that the company is likely to appoint an interim CEO from its existing leadership till it finds a replacement.
At 09:44 hrs Quess Corp share price was quoting at Rs 639.20, down Rs 90.95, or 12.46 percent on the BSE.
While a Quess Corp spokesperson did not respond to email queries from Moneycontrol, Quess promoter Ajit Isaac and Moraje did not respond to repeated calls or messages on this query. To be sure, the final decision will be taken by the board at the meeting scheduled on February 10 to announce the company’s third-quarter results.
The markets seem to have already gotten a whiff of the development as the Quess Corp stock has come under pressure in the last few weeks.
Promoter-CEO clash
A person familiar with the development said Moraje's exit was likely due to differences in strategy between him and Isaac. "While Quess had an aggressive expansion strategy and was spreading itself too thinly in various businesses, Moraje streamlined things and exited loss-making businesses. He brought a lot of focus on cash flow and profitability," a source said.
Moraje's pedigree
Quess Corp had brought Moraje as group CEO in November 2019 from McKinsey, where he was a senior partner and a leader in the firm's Asia TMT practice.
Isaac said then that Moraje's priorities would be to drive its strategic platform consolidation and accelerate its tech transformation. A graduate of NIT Surat and IIM A, Moraje has over 20 years of experience in helping institutions across sectors such as tech, IT services, financial services, telecom, and media on strategic and operational issues.
Last year, Quess separated its chairman and managing director roles, with Moraje elevated as Group CEO and MD, while Isaac continued as the executive chairman of the company.
“Founders bring in CXOs to professionally manage the company. If it goes well, it is good for the firm. But in such cases one cannot guarantee long tenure,” a second source said.
The third source pointed out, “Ours (recruitment/staffing) is a recurring business and the face makes a difference. If you have an owner/founder-driven company, you don’t want another level of hero creation at the senior level, apart from the core team.” This is so that even if the heads change, the businesses are not impacted, he added.
Quess performance
The staffing industry was one of the worst-hit when the pandemic struck in April 2020 as companies paused their hiring plans due to uncertainty around the pandemic. Even as hiring resumed, while IT and tech-related jobs saw a huge spike, the non-IT sector is slowly recovering.
This impacted companies such as Quess Corp and Teamlease Services. For Quess, the revenue dropped 20 percent in Q1 FY21. While the revenue was flat in the first quarter of FY22, Moraje said in an interview with Moneycontrol, “We acquired 48 new customers in general staffing, and 246 new customers across the business. It is again higher than the 196 customers we acquired in the quarter one a year ago.” The company registered revenue of Rs 3,228 crore in July-September 2021 quarter, up 8 percent year-on-year.
Moraje was also bullish on investing in technology tools to offer value-added services to its customers. This includes an automated digital supervisor tool for security services. Moraje said that while these are still in the early stages, such value-added services might improve sales, and higher margins if the customer is satisfied. “This will scale up gradually and sequentially over time,” he said then.
Founded in 2007 and headquartered in Bengaluru, Quess Corp offers staffing and managed outsourcing services across processes such as sales and marketing, customer care, after-sales, back office, manufacturing operations, facilities, and security management, among others. It claims to be the country's largest staffing firm with over four lakh associates. It bought job listing portal Monster's India unit and HCL Infosystems' care business in 2018.
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