3 min read.Updated: 17 Jun 2017, 12:48 AM ISTVarun Sood
Vishal Sikka had recently entrusted Sandeep Dadlani with the additional responsibility of generating more business from Infosys's new software solutions
Bengaluru: Infosys Ltd Americas head and global head of its manufacturing, consumer packaging and goods and retail units, Sandeep Dadlani, has resigned, in a big setback to chief executive officer Vishal Sikka.
Sikka had recently entrusted Dadlani with the additional responsibility of generating more business from the company’s new software solutions, including the artificial intelligence platform Nia.
Dadlani, who was one of the four presidents at Infosys, was overseeing business amounting to 34%, or $3.5 billion of Infosys’s $10.2 billion revenue, and was also the chairman of Edgeverve, a subsidiary of Infosys, India’s second largest computer services firm.
The reason behind Dadlani’s departure was not clear although he is learnt to have put in his papers last week, according to a person familiar with the development who requested anonymity.
“Sandeep has played a key role in the success of Infosys over his career and in our transformation journey these past three years. We wish him the best in the journey ahead," Sikka said in a statement.
The company announced the appointment of Karmesh Vaswani as head of retail, consumer packaging and goods, and logistics, and Nitesh Banga as the head of manufacturing.
Dadlani, who joined Infosys in January 2001, was the front-runner to take the top job at Infosys in 2014 when Infosys scouted for a chief executive officer, before eventually deciding to hire former SAP SE board member Sikka.
Dadlani’s departure is a blow to Sikka, who is battling against time to put Infosys back on the growth pedestal, as an embattled board and management face questions on poor corporate governance from some of the company’s founders, led by N.R. Narayana Murthy.
This latest exit at Infosys is important for two reasons. First, it puts a question mark on Sikka’s stint as CEO. Nine executives of the rank of executive vice-president (EVP) and above have quit Infosys since he took over as Infosys’s first non-founder CEO in August 2014.
“Sandeep’s exit is of concern because it suggests that Vishal is finding it difficult to retain his senior management team," a Mumbai-based analyst at a foreign securities house said on condition of anonymity. “This despite the fact that Infosys is paying a handsome salary to all its senior executives. So continuing senior management exits sends across a message to the rest of the organisation that senior leaders don’t have much faith in the CEO’s strategy."
Many executives in the past have questioned Sikka’s management style, and whether he is finding it difficult to build a stable senior management team. Last month, Sikka’s former SAP colleague and head of Infosys’s industrial internet business, Gordon Muehl, resigned as well.
Finally, Infosys, like its other Indian IT rivals, is seeing less business from retail giants Wal-Mart Stores Inc. and Best Buy Co. Inc. as traditional retail companies try to fend off competition from the rise of e-commerce companies like Amazon as more people opt to buy online.
Retail companies are the second-largest buyers, behind banks and financial services clients, for services from home-grown technology firms, and Infosys losing its senior-most executive managing business from retail clients is another worry for Sikka.
“From a client perspective, Sandeep had strong customer connects. His departure will make it tough for the new heads as they will have to again build relationships afresh, and so can probably impact business in retail and manufacturing industry," said the analyst cited above.
When Sikka was named CEO-designate in June 2014, Infosys elevated 12 senior leaders, including Dadlani, to the rank of EVP, which then used to be the third rung of management. Last year, four of these executives were promoted to the rank of presidents. During this time, four EVPs quit. These were former chief financial officer Rajiv Bansal, former head of manufacturing Sanjay Jalona, former head of healthcare and life sciences Manish Tandon and former head of business process outsourcing (BPO) Gautam Thakkar. Sikka, during this time, also promoted many executives to the rank of EVP, taking the total number to 13.
Three of these executives—former head of consulting Sanjay Purohit, former head of BPO Anup Upadhyaya and former head of EdgeVerve Michael Reh—left too. In December, Infosys sacked its former chief legal officer and EVP, David Kennedy.
Shares of Infosys fell 1.24% to Rs940.50 at the close of trading on the BSE on Friday. The benchmark Sensex edged down 0.06% to 31,056.40 points.
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