Board distressed by the personal attacks on employees
In an unexpected move, Vishal Sikka, the MD, and CEO of Indian technology major Infosys announced his resignation citing â€œdistractions and disruptionsâ€ caused by anonymous letters.
Sikka, who joined Infosys three years ago as the CEO, will now serve as the Executive Vice Chairman of Infosys.
Infosys has announced that UB Pravin Rai will take charge as the interim MD and CEO until the board recommends a replacement for Sikka.
According to an official press release from the Indian IT major, the resignation of Sikka as the MD and CEO of Infosys was accepted by a Board of Directors meeting held on August 18.
The release says that Sikka in his resignation letter cited a continuous stream of distractions and disruptions in recent months and quarters as the reason for his move.
The board members, while accepting the resignation of Sikka, said they were pained by his decision, but considering the personal and professional attack that Sikka had to go through in recent months through anonymous letters, he seems to have valid reasons to quit as the CEO and MD of Infosys.
The board of directors had earlier ordered an inquiry into the allegations raised in the anonymous letters, but they found no merit.
In the meeting held today accepting the resignation of Sikka, the board categorically denounced the critics who flagged false allegations, which according to them have harmed the morale of Infosys employees and now caused heavy loss to the company with the resignation of â€œvaluedâ€ CEO.
The official release from Infosys says: â€œThe Board thanks, Dr. Sikka for his outstanding leadership of the Company, and for his extraordinary contributions during a period of rapid evolution in this industry. The Board also appreciates Dr. Sikkaâ€™s commitment to facilitate a smooth transition to new leadership fully equipped to lead Infosys forward in this new era in our industry and to ensure continuity in our service to our valued customers.â€
The release also says thatÂ Sikka has been appointed Executive Vice Chairman effective and will hold office until the new permanent Chief Executive Officer and Managing Director takes charge, which should be no later than March 31, 2018.
The release also confirms the appointment of U. B. Pravin Rao as the Interim Chief Executive Officer and Managing Director and will be reporting to Sikka.
When Dr. Sikka took over, Infosys was lagging behind industry growth.Â During Dr. Sikkaâ€™s tenure as CEO, Infosys registered a revenue growth from $2.13B in Q1FY15 to $2.65B this past Q1, with strong margin performance and cash generation, throughout his tenure.
Dr. Sikka’s approach to profitable growth delivered an increase in liquid assets (including cash and cash equivalents) from $4.9B in June 2014 to $6.1B in June 2017, while paying dividends of over INR 19,000 Cr. (including dividend distribution tax) over these three years.
Under the leadership of Dr. Sikka, Infosys launched breakthrough new programs to drive innovation, education, and entrepreneurship on a large scale.
These programs included
1)Â Â Â Zero Distance, a program which was the first of its kind in the industry intended to drive grassroots innovation at a massive scale, through every employee.
2)Â Â Â Design Thinking training, the largest program of its kind to drive creative confidence and problem-finding in every Infoscion.
3)Â Â Â Â Zero Bench, a bold notion of leveraging the bench as a means to drive additional value for clients.
The release also says employee attrition has decreased dramatically during Dr. Sikka’s tenure, particularly among high performers, utilization is at a 10-year high, and client satisfaction is at an all-time high.
The Company launched more than 25 new services which rose to 8.3% of revenue last quarter, from zero percent in April 2015.
Under his leadership, Infosys developed and launched its artificial intelligence platform Nia, and already has more than 160 artificial intelligence scenarios deployed with more than 70 clients.
Infosys has also ventured into new horizons both with design-thinking with clients and its start-up investment fund. Further, the Infosys US foundation has done inspiring work in bringing computer science education and a culture of innovating to the masses.
“Vishal has made a seminal contribution to the transformation of Infosys, and he will be remembered for infusing a refreshed sense of direction, purpose and energy in the organization. His vision for the future of the industry and the Company will remain a strong reference point as we chart the future course for Infosys in this new era in our rapidly evolving industry. On behalf of our entire board of directors, I wish him well for the future,” said R. Seshasayee, Chairman of the Board.
Ravi Venkatesan, Co-Chairman of the Board, said: “I want to thank Vishal for his commitment to ensure a smooth transition and his commitment to a seamless experience for our clients. Pravin is a veteran Infoscion with deep knowledge of the business, and his long experience in the Company will help ensure a smooth transition.”
Dr. Sikka commented, “I started my journey as the CEO of this iconic Company with a mission to transform it on the basis of software, especially [artificial intelligence], and innovation, enabled by education. Three years later, I feel proud of our progress and achievements, from profitable revenue growth to rapid purposeful adoption of software, new services and grassroots innovation, to the extraordinary recognition from our clients worldwide.”
â€œI am deeply grateful to our Board for providing me with strong support and guidance, and especially wish to thank our Chairman [Seshasayee] for his extraordinary and thoughtful stewardship, and look forward to working together on a smooth transition.Â Congratulations to my friend and partner Pravin on his appointment, and heartfelt thanks to all Infoscions for their warmth, amazing support and the sparks of their imagination,” he added.
The Board has mandated the Chairman and the Nomination and Remuneration Committee to expeditiously identify and select a permanent CEO and Managing Director.