Narayana Murthy logs out of Infosys

June 13, 2014 - 9:16:59 am
Infosys’ newly appointed CEO Vishal Sikka speaks during a news conference at company’s headquarters in Bangalore yesterday.

MUMBAI: Indian outsourcing giant Infosys announced a new Chief Executive yesterday and said its co-founder N R Narayana Murthy would step down as executive chairman after a string of high-profile departures.

Vishal Sikka, previously with German software giant SAP, will take the helm as chief executive from August 1 and pledged to create a “more global” company that was “not limited by geography”.

Murthy, who returned from retirement as executive chairman in June last year to help revive the company’s fortunes, will step down from his current role tomorrow. His son Rohan —who joined as executive assistant at the same time — will leave on the same day, the statement said.

The IT giant seems keen on ending the string of senior departures since Murthy returned to the company — as many as 12 have departed over the past year, according to local reports.

The last big name to quit was President B G Srinivas, who was thought to be a frontrunner for the chief executive post before he left the company last month.

At a press conference yesterday, Murthy laid out various changes at the top management level, including the dissolution of his own office after he steps down. “Vishal will have the opportunity to chart out his own path while leading the company,” he said.

Sikka himself said he was honoured to lead the “iconic” company but that it was too early to comment in detail on his plans.

“My sense of companies and customers in not limited by geography,” he told reporters. “Each area has a set of challenges and opportunities. I want to create a more global company.”

Sikka’s appointment means that S D Shibulal, the current chief of Infosys, will retire nearly five months earlier than expected.

Indian media had been rife with speculation about likely candidates to step into Shibulal’s shoes, and Sikka is the first person in the job who is not one of the company’s founders. Created three decades ago by Murthy, Shibulal, and five others around a kitchen table, Infosys has been losing market share to rivals such as Tata Consultancy Services and HCL and the recent staff departures had only further tainted its image. “I believe there were many reasons for the departures, including Murthy’s focus on weeding out non-performers and adjusting responsibilities of others,” Ashish Chopra, an IT analyst with brokerage Motilal Oswal Securities in Mumbai, said. “Along with these, some people who believed they would not be able to enjoy power or move into bigger positions also left.”

Infosys rose nearly 4 percent in early trading after the new posts were announced but levelled out later to be down 0.50 percent at Rs3,163. Last October, Infosys said it would pay $34m to the US government to settle an investigation into alleged visa fraud by the company. Many of India’s IT outsourcing firms have reported subdued growth in recent years due to the global economic slowdown.

In April however, the Nasdaq-listed Infosys beat market estimates with the announcement that its consolidated net profit had surged 25 percent in the January to March quarter. AFP