Amid an uncertain global macro environment, top IT firms are also dealing with change of guard and senior level transitions involving some of the most high-profile faces in their companies. While attrition at lower level has made headlines in the past, this time around it is the senior leadership churn in companies such as TCS and Infosys that is in the spotlight.
Infosys has seen two president-level exits in a matter of months, with Ravi Kumar and Mohit Joshi leaving the company to join top tier IT firms Cognizant and Tech Mahindra, respectively.
Last week, Tech Mahindra announced the appointment of Joshi as MD and CEO-designate, who will take over the charge from CP Gurnani after his retirement on December 19 this year.
On Thursday, the country's largest software services firm Tata Consultancy Services (TCS) in a sudden announcement said Rajesh Gopinathan, its CEO for more than six years with over four years left to his second five-year term, has decided to move on from September 15.
The USD 25-billion software giant announced that K Krithivasan, president of its BFSI vertical which contributes 31.5 per cent of its top-line, will head the company as the CEO-designate with immediate effect.
"Overall, the churn in many companies is a culmination of a lot of factors coming together at one time. It is a good thing for the industry to have a change of guard at periodic intervals as it brings in fresh blood and new thinking," industry veteran and former Infosys director TV Mohandas Pai told PTI. Many factors are at play here, he pointed out.
"One common thread, barring one or two exceptions like Cognizant, is that all people have seen stresses of pandemic. Some may be feeling tired and wanting to change.
Secondly, many of them after pandemic are re-examining their career path and don't want to wait to be CEOs of the companies where they are, so they leave whenever they get a chance to be a CEO (elsewhere). And then post-pandemic some people want to retire, and that is causing vacancy. I guess it is a culmination of many things that are happening, which is causing the churn," Pai said.
The shocking resignation of TCS' Gopinathan has taken market watchers by surprise. The unexpected CEO exit is not likely to hurt business delivery though, according to Motilal Oswal's recent report on TCS.
"Gopinathan's departure from TCS is surprising, as he has led the company for only six years and was expected to continue for the long term given his age (52 years). Moreover, while the company's growth has trailed peers like Infosys recently, it has handled external pressures, including a transition to Digital delivery and the Covid impact relatively well despite its size," Motilal Oswal said in a note on March 17.
Gopinathan, 52, said this is his first resignation and he has not written a resume since the campus days as he joined Tata Industries 27 years ago from the campus and TCS 22 years ago. He did not reveal his plans after September 15.
"We are in the most stable times given what we have gone through in recent years. Of course, there are some ups and downs. It was important for me to announce the decision before the start of the new fiscal year," Gopinathan said on the timing of his resignation.
On his priority now, he said, "my immediate priority is that Krithi steps in smoothly and I will be available 100 per cent for him". Gopinathan was reappointed for five more years till February 2027, after his first five-year term as TCS CEO came to an end last year. Krithivasan doesn't intend to make any dramatic changes to the organisation's existing strategy.
"It's a continuum, we don't change strategically when a new CEO comes in. But we will change according to what our customers want and how the market changes. We will not make any short changes but will continue to drive on our core focus of being with the customers," Krithivasan said.
Just days before this, Mohit Joshi resigned from Infosys after putting in more than 20 years in the company, and was named the MD and CEO designate of Tech Mahindra.
Joshi will take over the reins from C P Gurnani (the present MD and CEO) after his retirement on December 19 this year. Gurnani has been one of the longest serving chief executive officers of the Indian IT sector, and is among of the most recognised faces of the industry. Gurnani had joined Tech Mahindra in 2004 and later spearheaded the takeover of scam-ridden Satyam Computers and its merger with Tech Mahindra.
He has been MD and CEO of Tech Mahindra since June 2009. Meanwhile, Joshi's exit after the recent move by former president and COO Ravi Kumar marks the second loss of a senior executive at the Bengaluru-headquartered Infosys to a top competitor, market watchers pointed out.
Nasdaq-listed Cognizant in January named Ravi Kumar S as its new chief executive officer (CEO); Kumar succeeded Brian Humphries. "The big picture is that large companies now run with processes momentum and references, not people at the top. If the leadership bench strength is adequate there is little or no impact of leadership transitions," industry expert and chairman of 5F World (a platform for digital startups, skills and social ventures) Ganesh Natarajan said.
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