Bengaluru: As IT companies grapple with top-level management churn, Infosys Ltd in February said that all the roles left vacant due to senior leadership departures have been internally filled, according to a research note by Nomura Holdings, Inc.
Citing a deep bench of senior leadership within the company, Infosys’s top management said of the company’s more than 90 senior vice-presidents and executive vice-presidents, more than 45 (or 50%) have been with it for two decades, and 27 (30%) have been with it for 25 years, according to the Nomura research note.
“All the roles of the recent senior leadership departures have been filled internally (Jayesh Sanghrajka replaced Nilanjan Roy as CFO, Dennis Gada replaced Mohit Joshi as BFSI head, and Ravi Kumar’s role of deputy COO was filled by two internal candidates of ~30 years),” read Nomura’s research note, citing Infosys’s response to investors’ questions about senior-leadership attrition hurting its growth.
Infosys announced in December 2023 that Jayesh Sanghrajka, an 18-year veteran of the company, would take over as CFO from 1 April 2024, replacing Nilanjan Roy, who has held the post since 2018. In May 2023 it replaced Mohit Joshi – the current Tech Mahindra chief executive – as the global head of the banking, financial services and insurance (BFSI) vertical with Dennis Gada.
The IT services company said the use of internal talent prevented it from losing clients, and that it strengthened relations with some existing clients, without mentioning how, Nomura said.
Infosys expects to end the FY24 with revenue growth of 1.5-2% against the 1-2.5% it had projected in October 2023. Infosys reported $4.66 billion in revenue for the December quarter, down 1.2% sequentially.
Churn at the top
An exodus of senior management isn’t unheard of at Infosys, which has been wrestling with top-level departures for more than two years now. After Salil Parekh took over as chief executive in 2018, at least 11 senior executives ranked SVP and above left the company in his first term (until May 2022), according to a Mint review of press releases and the company’s annual reports. His first term as Infosys CEO was originally meant to run until January 2023. However, Parekh was given an early extension in May 2022 and by December 2023, 18 months into his second term, another dozen or so senior executives had left Infosys.
“In terms of leadership, we are indeed fortunate to have a good team and a very strong set of leaders within the company and over last several quarters and even [further back], those who have taken on many of the new positions are people who have been in the company, have developed their skills there,” Parekh said in the company’s post-Q3-earnings press conference.
Promote internally or hire externally?
“There are advantages and disadvantages to both promoting from within and hiring externally. Depending on the circumstances and organisational culture, companies prefer one or the other, or a mix of both. Most companies are probably biased towards internal promotion,” said Peter Schumacher, founder and chief executive of German executive management consulting firm, Value Leadership Group.
“Historically, Infosys has promoted from within, which is advantageous as it provides continuity,” said Schumacher. He added that the practice of hiring CEOs from outside is eliminating differences between IT companies.
“Recently, a lot of CEOs in the Indian IT-services sector have been external hires from competitors. While this seems like a safe bet, it harbours the risk of industry-wide commoditisation, which means companies are all offering similar, highly standardised services, and pricing is transparent. Customers are increasingly seeing a sea of sameness and Indian IT-services firms have little authentic differentiation. Many companies in the sector have become almost interchangeable and are chasing trends as opposed to leading them,” said Schumacher.
In an emailed response to Mint’s queries, Infosys pointed to its Q3 management commentary.
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Published: 06 Mar 2024, 03:45 PM IST