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The Long-Drawn Battle of Infosys

If you’re like me and you start every morning off by reading the latest tech news over a cup of coffee, it seems you’d be hard-pressed to not have Infosys news updates fly across your screen in 2017. The Vishal Sikka saga is so rampant it feels like a long running Netflix series. So I decided to gather all the information up in a timeline of events of India’s second largest software exporter.


Let's first start with a little background on the company: in 1981, seven engineers started Infosys with just USD $250. From the beginning, the company was founded on the principle of building and implementing great ideas that drive progress for clients and enhance lives through enterprise solutions. For over three decades, Infosys has been a company focused on bringing to life great ideas and solutions that drive progress for their clients.

August 18th, 2017, Vishal Sikka resigned as the Managing Director and Chief Executive Officer of Infosys. However, he continues to be the executive vice-chairman until a successor is found even as the industry deals with a difficult transition to digital services and data-based computing. In his email to the firm's employees, Sikka wrote, "But now, after much thought, and considering the environment of the last few quarters, I am clear in my decision." His sudden decision to quit came against the backdrop of a tussle between the co-founders and the CEO.

Sikka squarely blamed the “continuous noise” that hurt him and Asia’s No. 2 software exporter as he stepped down as chief executive officer after months of acrimony between the board and a cohort of founders led by ex-chairman N R Narayana Murthy.

“I cannot carry out my job as CEO and continue to create value, while also constantly defending against unrelenting, baseless/malicious and increasingly personal attacks,”  Sikka wrote on his personal blog after announcing his resignation. The noise, he said later in a video conference from Infosys’ offices in Palo Alto, “took a personal toll on me and the company,” said Vishal Sikka.

The resignation of Sikka, who joined from European software giant SAP SE in 2014, caps a year-long battle with a billionaire who accused the company he co-founded of numerous governance lapses. Infosys openly blamed Murthy in a statement for attacking Sikka, which was leaked in an email -- that cited independent directors as saying, Sikka was more chief technology officer material than CEO material.

However, things were not always bad for the management. Sikka was appointed CEO in 2014 "to help transform the company during a time of significant change in the services industry, change that was brought on by the cost imperatives of clients on the one hand, and significant and rapid advancements in technology on the other hand."

Here's a look at the events to date:

Timeline

2014

June 14th

Infosys Appoints Vishal Sikka as CEO and Managing Director.
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2014

July 15th

Vishal Sikka Earns 60% more than TCS CEO.

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2014

August 8th

Vishal Sikka Okays 5000 promotions at Infosys.
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2014

August 23rd

Vishal Sikka Gets shares worth RS 8.2 Crore from Infosys.

2014

October 8th

Infosys founders NR Narayana Murthy and S Gopalakrishnan Bid farwell after 33 years.

2014

October 10th

Infosys shares Jump 6% as Q2 Profit beats estimates; Board approves 100% bonus for employees.

2014

October 16th

Vishal Sikka simplifies internal processes.

2014

November 13th

On 100th day as CEO Vishal Sikka criticizes other IT companies.

2014

December 9th

Four Infosys co-founders sell holdings worth $1.1 Billion.

2015

January 9th

Infosys soars as Q3 profits beat estimates.

2015

July 21st

Q1 net rises 5%; Vishal Sikka says efforts paying off.

2015

October 12th

Rajiv Bansal resigns as CFO; Infosys beats expectations in Q2.

2016

February 24th

Infosys extends Vishal Sikka's tenure until March 2021.

2016

April 15th

Infosys Q4 profit rises 3.8%. It’s the fourth straight quarter the company has beaten the analysts estimate.

2016

May 17th

Vishal Sikka rakes in RS 49CR / $7.45 MN Salary in FY16.

2017

February 8th

Founders raise question on Governance, Question Vishal Sikka's Pay.

2017

February 13th

Vishal Sikka Defines relationship with Narayana Murthy as “Heartfelt warm”.

2017

February 17th

Infosys Founders VS Board Row SEBI brought in to examine whistleblowers letter.

2017

February 20th

Senior staff salary cut by up to 47% in FY16.

2017

April 13th

Infosys misses revenue target, but aims to hit $20B by 2020.

2017

May 15th

Vishal Sikka's salary down at $6.7M.

2017

June 9th

Infosys shares drop 3.5%.

2017

June 14th

US Head Sandeep Dadlani resigns to pursue personal interests.

2017

June 16th

Infosys reports 1.3% net profit growth in Q1.

2017

June 18th

NR Narayana Murthy regrets quitting as Infosys chairman in 2014.

2017

July 19th

Executive Vice-President Ritika Suri quits.

2017

August 18th

Vishal Sikka resigns as Infosys CEO; SENSEX pluges nearly 300 Points.

2017

August 26th

Nandan Nilekani back at Infosys.

2017

August 30th

Vishal Sikka's Infosys exit, wife Vandana quits Infosys Foundation in US.

2017

September 3th

Infosys shareholders approve of UB Pravin Rao; to continue as interim-CEO and MD for five years

2017

September 10th

Infosys to hire 6,000 engineers annually over next 2 years.

2017

September 11th

Infosys completes Brilliant Basics acquisition.

2017

September 12th

Infosys Chooses Raleigh, North Carolina for its Technology and Innovation Hub.

2017

September 13th

Infosys’ design head Sanjay Rajagopalan quits.

2017

September 19th

Infosys inks 7-yr deal with CMA CGM Group.

 


ub_pravin_rao.JPGAfter Vishal Sikka resigned as CEO and MD, the company has appointed Chief Operating Officer UB, Pravin Rao as the interim CEO and Managing Director. The task of finding the new CEO has been given to the newly-appointed Infosys non-executive chairman, Nandan Nilekani, who has expressed that he was excited about the future of the IT firm, insisting that the Board of Directors is committed to restoring complete stability to the company. “I am extremely excited about the future of Infosys. The board is focused on bringing complete stability to the nandan-nilekani-salary-infosys.jpgcompany. It has also tasked its Committee of Directors to work with the CEO and management to review and refresh the company’s strategy by October,”  Nilekani said, after a meeting with the Board of Directors of Infosys Limited.

"I have come in to focus on the future of the company, I have come in to take the company forward and deal with its challenges,"  Nilekani told investors on a call on Friday, adding he would stay with the IT firm for as long as needed.

Sikka’s exit marks a blow to the company as it struggles with the evolving needs of customers from Goldman Sachs Group Inc. to Daimler AG. Sikka said on his blog he remained dedicated to the company but decided to throw in the towel rather than grapple with unspecified distractions. Co-Chairman Ravi Venkatesan later told reporters Infosys hoped to put the dispute with its founders “to bed” in coming weeks, while Sikka helps pick his successor.

He was always unusual for an Infosys CEO in that he isn’t one of the founders and is based in the U.S., where the company gets nearly two-thirds of its revenue. He attended his first media briefing after quitting via video conference from the Palo Alto office, which ironically was a sore point with the founders who considered the expensive location a wasteful expenditure and criticized Sikka for flying private charters to meet customers.

Infosys has been trying to haul itself out of a growth slowdown through job cuts and investment into new areas such as data analytics and had only just shown signs of a revival. Sikka’s resignation now adds leadership instability to its list of challenges.

With news unfolding daily about Infosys make sure to stay tuned. I will be writing a part-two when the company starts to show signs of slowing down and leveling off.

Natalie Evans

Natalie Evans

Natalie Evans has over 16-years in the tech industry and currently works as the event coordinator and tech reporter for CMS-Connected, keeping up-to-date on what's happening in and around the Content Management industry.