2013 sees major senior level exits in Indian IT
The Indian IT industry has witnessed major seniorlevel exodus this year. Of course it is common for executives in the IT sector to seek greener pastures, but what’s noticeable in 2013 is that the top guys in the IT companies who had put their blood and sweat in their organizations and seemed to be the most fit for their jobs have called it quits. Several of them are veterans and their exits mostly came as a surprise to many in the industry. Analysts believe cost pressure, better growth opportunities and changing market situations have led to their exit.
When it comes to large scale exit of senior executives the first name that comes to mind is Infosys. The company had seen six senior-level exits in the past five months since NR Narayana Murthy returned as Infosys Chairman to revive the company’s sagging fortunes.
Basab Pradhan, who joined Infosys in 1994 (and rejoined in 2009) heading its Global Sales, announced his decision to quit in July this year. Since then there has been a series of high profile exits. In August, Ashok Vemuri, who was heading the company’s operations in the US went on to join iGate as CEO, while Sudhir Chaturvedi, Infosys’ VP and financial services head for the Americas, also resigned to join NIIT Technologies as COO.
Infosys also saw the exit of other high profile executives such as Kartik Jayaraman, the company’s Head, BPO sales in Australia and Humberto Andrade heading the Latim American units. Recently, Infosys’ highest paid executive Stephen Pratt had also quit after a nine-year stint in the company.
Moving away from Infosys, where top executive movement has become the usual phenomenon, we see that after a sterling career of over 24 years with Wipro, industry veteran Anand Sankaran decided to make a move in October this year. Sankaran was heading the infrastructure services business constitutes nearly a third of Wipro’s revenues. He has joined Dell the very same month as its president and global head of its infrastructure and cloud computing business.
Of the other notable examples, Vishak Raman has quit Fortinet after heading the India operations for more than a decade. Raman joined Fortinet in 2003, and under his leadership, Fortinet emerged as a market leader in the UTM appliance market. Last month, another industry Veteran Anand Naik had quit Symantec after being with the security company for over seven years. According to sources, Naik will now nurture his entrepreneurial dreams, something he wanted to do for a long time.
There are many more such examples. But industry insiders wonder what makes these top executives move out of their comfort zones?
Why senior execs call it quits?
Many are asking whether those who have quit are taking their exodus willingly. In other words, are they leaving due to higher ambitions or they are under tremendous pressure to leave after loyally serving their companies for several years. Experts believe this is a difficult question to answer, as the reactions are mixed. Of course some do not have qualms in moving out and believe that it is important to keep moving. As Wipro’s Sankaran said: “My new role in Dell is exciting and challenging,”- just the kind of stuff innovators and change makers would look for.
According to many, cost pressure is one the key reason companies are willingly let their top executives go. Like Infosys executive Chairman NR Narayana Murthy has already announced that the company will focus on reducing costs by trimming a number of senior employees. Recently he informed Barclays analysts that Infosys needs to both improve its own systems and processes, and this is one of the means to strengthen its capabilities.
Lack of growth clarity is also compelling many top executives to move out of the companies they had served for many years. For example, Ashok Vemuri, who many thought was in race to be the next CEO of Infosys must have thought the wait, would have been too long (or his turn may never come). Moreover, Vemuri’s salary package at iGATE worked out to more than double the amount he received at Infosys, so this was obviously a more logical decision.
However, the same cannot be said for everyone. If we take the example of iGate once again, in October, Sean Narayanan, the chief delivery officer of iGate, resigned, seemingly upset with the newly appointed CEO, Vemuri’s style of functioning. Narayanan joined iGate in 2006 and helped create an integrated delivery organization that today employs 28,000 people delivering IT solutions to over 300 clients. He has also submitted a note to iGate promoters Sunil Wadhwani and Ashok Trivedi, providing details about the friction between him and Vemuri.
Will mid-sized firms stands to gain?
In the process, this trend may benefit mid-sized IT companies who are willingly hiring these senior executives to gain better management insights. These companies are also hungry for growth and are eager to get to the billion-dollar revenue club. “Mid-sized IT players have become more credible and they are now of a size where they can afford to pay top-dollar salaries,” said CK Guruprasad, principal at executive search firm Heidrick & Struggles in an interview with ET. He believes the leaders with a bagful of experience can also bring about a new level of growth to these companies.
On the whole, 2013 had been an interesting year in terms of executive movement in the Indian IT industry, especially because the general attrition rate was low, noted research firm Credit Suisse. However senior level executives have certainly made it an exception to this rule!
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