BackAshok Vemuri exits Infosys as Narayana Murthy shakes up things
Ashok Vemuri was widely considered to be a contender for the top job at Infosys when S.D. Shibulal’s term ends in 2015
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Bangalore: One highlight of founder N.R. Narayana Murthy’s three-month-old second stint as executive chairman at Infosys Ltd has been the exits of senior executives.
On Wednesday, the company announced the departure of Ashok Vemuri, a member of the company’s board, global head of manufacturing and the Americas, a man responsible for around $2 billion of annual revenue, and an executive often mentioned as a future chief executive officer (CEO) after the last of Infosys’s founders S.D. Shibulal finishes his turn as CEO.
No reason was given for the departure, but two theories are doing the rounds.
One, Vemuri was asked to leave because he was seen as one of the people responsible for the company’s poor performance compared with its rivals that, in June, forced the board’s hand and made it call back Murthy from retirement.
Over the past two years, Infosys has lost its tag of being the bellwether for India’s $108 billion information technology (IT) industry. The firm missed its forecast for revenue growth at least twice last year and stopped issuing quarterly revenue forecasts from June 2012.
More worryingly for Infosys, it lost significant market share to faster-growing rivals such as Tata Consultancy Services Ltd and US-based Cognizant Technology Solutions Corp. Cognizant has now beaten Infosys in terms of quarterly revenue in the last five quarters.
Two, Vemuri was not happy with Murthy’s centralized style of planning and disagreed on the way forward for the company which was once Indian IT’s gold standard.
Vemuri, who will remain with the company till 12 September, couldn’t immediately be reached for comment.
Infosys said Murthy was not immediately available for comment. “We will check and get back to you on your request," a company spokeswoman said in an emailed response.
Vemuri’s exit comes after that of Infosys’s US head of financial services, Sudhir Chaturvedi, last week and the July exit of global head of sales Basab Pradhan.
Infosys named long-time employee Sanjay Jalona, regional head of manufacturing in North America, as Vemuri’s replacement.
The exit leaves Murthy with fewer choices to pick a CEO, if he were to choose an insider: company veterans V. Balakrishnan, currently a board member and head of Infosys BPO, Finacle, and the India business; and B.G. Srinivas, another board member and head of Europe. In May, ahead of Murthy’s return, a member of Infosys’s board said, speaking on condition of anonymity, that a committee of the board was reviewing external candidates for the post of CEO.
In July, several former senior executives said they had received calls from Murthy asking them to return to Infosys. None of the executives wanted to be identified.
Over the past few weeks, Murthy has re-hired old timers such as Binod Hampapur Rangadore as the head of global delivery. He has promoted veterans including Ranganath Mavinakere, who now heads cost optimization, and Nithyanandan Radhakrishnan, who now serves as general counsel, on to its executive council. He has also appointed his executive assistant, son Rohan Murty, as vice-president (pending approval from the ministry of corporate affairs).
It is unlikely that Murthy will hire anyone from outside the company as the next CEO, said a consultant.
“There has been speculation that Infosys could hire someone from outside—I don’t think anyone will take that suggestion seriously. Until the dust settles and we get a clearer idea about what Murthy is trying to do, I don’t think credible outside candidates will give Infosys serious consideration," said Peter Schumacher, founder of Germany-based Value Leadership Group, which advises companies on their Europe strategy.
Still, one Infosys tracker saw Vemuri’s exit as a sign of the change Murthy is ushering.
“Murthy and Shibu are showing a lot of determination to steer Infosys in a new direction, and the recent departures of Vemuri along with several other executives provide clear evidence that the change is under way—and under way fast," said Phil Fersht, founder and CEO of outsourcing research firm HfS Research.
As for Vemuri, he will likely end up as CEO somewhere, a former colleague seemed to suggest. Media reports have suggested that Vemuri could be a top candidate to take over as CEO of iGate Corp., which recently sacked Phaneesh Murthy, another former Infosys veteran.
“Ashok is an extraordinary leader and has a lot of experience in building a business. He has the ability to talk to CEOs of global corporations and sell to them on equal terms," said T.V. Mohandas Pai, a former director at Infosys who worked with Vemuri for several years. Pai is currently chairman of Manipal Global Education. “He is certainly CEO material, wherever he goes."
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