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Rediff.com  » Business » Speculation over next CEO, exit fears cloud Infosys
This article was first published 10 years ago

Speculation over next CEO, exit fears cloud Infosys

Last updated on: June 03, 2014 09:27 IST


Photographs: Reuters Itika Sharma Punit in Bangalore

Employees, clients concerned about further top-level exodus; could hurt productivity, say experts.

As speculation over information technology major Infosys’ hunt for its next chief executive officer (CEO) gathers pace, the Bangalore-based company observed fatigue building among its employees and investors.

According to sources, few clients of the company have also started raising concerns over the search process and rumours of further exits from the company.

According to sources, several Infosys employees on Monday wrote emails to the senior management raising concerns about the CEO selection plan and reports of further senior-level exits which are  feared to be a fallout of this process. 

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Speculation over next CEO, exit fears cloud Infosys


Photographs: Reuters

Two of Infosys' senior executives - Rajesh Krishnamurthy, head of energy, communications (Global) and services (Europe), and Ravi Kumar S, head of insurance, cards and payments - responded to these queries by stating they have not resigned.

While some media reports had claimed that Krishnamurthy and Kumar were on their way out from Infosys, which has seen over 10 top-level exits in the past year, the two requested their teams to “disregard these rumours” and stay focused on clients. 

“There are rumours about my resignation and I thought I will dispel them immediately. This is completely baseless and has been published despite me telling the reporter in question. ...

Speculation over next CEO, exit fears cloud Infosys

Image: Infosys Executive Chairman N R Narayana Murthy.
Photographs: Courtesy, Infosys

An Infosys spokesperson said the company is communicating with all its stakeholders.

Analysts say it would be in best interest of the company to either conclude the CEO selection process soon or set a definitive timeline for the announcement.

“Since this is a very critical decision, one cannot expect the company to be hasty,” said Manish Bahl, vice-president at Forrester Research. “However, Infosys Executive Chairman N R Narayana Murthy must set a timeline for the search process and be transparent about it. That will calm the anxiety of employees and clients. It is very important for the company to focus on productivity and not indulge in any speculation.”

According to a source at a leading executive search firm, several senior managers at Infosys are looking out for opportunities and could be on their way out in the coming months.

Analysts also said several other seniors could resign from the company depending upon who the next CEO is. “Whether the company gets an external candidate or elevates an internal one, there will be some heartburn in the top layer; that could lead to further exits,” a senior analyst with a domestic brokerage firm said.

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Speculation over next CEO, exit fears cloud Infosys


Photographs: Reuters

Infosys has undergone massive organisational restructuring ever since the return of Murthy a year ago. In a letter to Infosys' employees last week, Murthy had said the departure of 10 senior executives from the company was in its best interests, and warned about further leadership transition. 

Earlier this month, Infosys board member and president B G Srinivas, who was widely considered to be among the front runners for the top job, had resigned from the company. According to sources, the resignation could have been triggered after Srinivas failed to emerge as the company's choice for its first non-founding CEO. 

“The speculative news has to be restricted in order to limit the negative impact,” said Shashi Bhushan, senior research analyst at Prabhudas Lilladher said. “The company should take the decision at the earliest to restrict any further erosion in confidence.” 

INFY’S ANXIETIES

* Several senior managers at Infosys are looking out for opportunities and could be on their way out in the coming months, say sources

* Analysts said several other seniors could resign from the company, depending upon who the next CEO was

* Senior executives Rajesh Krishnamurthy and Ravi Kumar S put to rest media reports of exits by asking their teams to “disregard such rumours”

 *Analysts say it is in Infosys’s best interest to either conclude the CEO selection process soon or set a definitive timeline for it

Source: source