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:
Infosys Appoints Vishal Sikka as CEO and Managing Director.
Vishal Sikka Earns 60% more than TCS CEO.
Vishal Sikka Okays 5000 promotions at Infosys.
Vishal Sikka Gets shares worth RS 8.2 Crore from Infosys.
Infosys founders NR Narayana Murthy and S Gopalakrishnan Bid farwell after 33 years.
Infosys shares Jump 6% as Q2 Profit beats estimates; Board approves 100% bonus for employees.
Vishal Sikka simplifies internal processes.
On 100th day as CEO Vishal Sikka criticizes other IT companies.
Four Infosys co-founders sell holdings worth $1.1 Billion.
Infosys soars as Q3 profits beat estimates.
Q1 net rises 5%; Vishal Sikka says efforts paying off.
Rajiv Bansal resigns as CFO; Infosys beats expectations in Q2.
Infosys extends Vishal Sikka's tenure until March 2021.
Infosys Q4 profit rises 3.8%. It’s the fourth straight quarter the company has beaten the analysts estimate.
Vishal Sikka rakes in RS 49CR / $7.45 MN Salary in FY16.
Founders raise question on Governance, Question Vishal Sikka's Pay.
Vishal Sikka Defines relationship with Narayana Murthy as “Heartfelt warm”.
Infosys Founders VS Board Row SEBI brought in to examine whistleblowers letter.
Senior staff salary cut by up to 47% in FY16.
Infosys misses revenue target, but aims to hit $20B by 2020.
Vishal Sikka's salary down at $6.7M.
Infosys shares drop 3.5%.
US Head Sandeep Dadlani resigns to pursue personal interests.
Infosys reports 1.3% net profit growth in Q1.
NR Narayana Murthy regrets quitting as Infosys chairman in 2014.
Executive Vice-President Ritika Suri quits.
Vishal Sikka resigns as Infosys CEO; SENSEX pluges nearly 300 Points.
Nandan Nilekani back at Infosys.
Vishal Sikka's Infosys exit, wife Vandana quits Infosys Foundation in US.
Infosys shareholders approve of UB Pravin Rao; to continue as interim-CEO and MD for five years
Infosys to hire 6,000 engineers annually over next 2 years.
Infosys completes Brilliant Basics acquisition.
Infosys Chooses Raleigh, North Carolina for its Technology and Innovation Hub.
Infosys’ design head Sanjay Rajagopalan quits.
Infosys inks 7-yr deal with CMA CGM Group.
After 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 company. 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.