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Another CEO candidate quits Infosys, whats behind Ashok Vemuri’s exit?

India’s second largest software services exporter Infosys on Wednesday announced Ashok Vemuri, its head of Americas and global head of manufacturing and engineering services had resigned. He’s the third senior executive to have decided to walk away from the Bangalore-based company in recent months.

The exits come at a time Infy’s founder NR Narayana Murthy is back at the helm trying to steer the company back to its bellwether days.

Before Vemuri’s resignation, the company’s sales head Basab Pradhan had quit in July and last week Sudhir Chaturvedi its head of financial services for the Americas region had put in his papers.

Reports say Murthy is currently on a tour in the US meeting clients, in his efforts to strengthen business there. After all Americas region accounts for around 60 percent of Infy’s revenue.

Vemuri’s exit certainly comes as a surprise since he was among the contenders to succeed SD Shibulal as the CEO in 2015. Apart from Vemuri, V Balakrishnan (BPO and India business head) and BG Srinivas (Europe head) were also seen in the CEO race.

So why then has Vemuri quit? Analysts suggest that with the arrival of Murthy and his son Rohan Murthy being taken on board as his assistant, could have made the road ahead for top execs like Vemuri hazy. Rohan Murthy is likely to be named as the vice president soon. This is in contrast to Murthy’s statements earlier that he was only going to be his executive assistant and help in driving the company.

According to one foreign brokerage, the buzz around Rohan Murthy does raise key questions, with respect to the top management stability.

A few other analysts feel that Vemuri’s exit could have repercussions on Infy’s business. 

The company has fallen behind rivals like Tata Consultancy Services (TCS) and Cognizant in the last couple of years, a key reason that prompted the board to call Narayana Murthy back in the driving seat.

Infy announced better-than-expected first quarter results in July. But it will take a few more quarters of such good results to convince the street that the company is indeed back on track.

But is the uncertainty at the top management level the main reason for Vemuri’s exit? Well, that and the restructuring undertaken by Murthy could be partly a reason. There is also a lot of buzz linking him to take over as CEO of rival IGate Corp. 

IGate, which acquired the much bigger Patni Computer in 2011, sacked its founder and CEO Phaneesh Murthy earlier this year over alleged sexual harassment charges by a subordinate employee.

There are several senior executives in the race to be named CEO at IGate, including Patni’s former CEO Jeya Kumar and Wipro’s former co-CEO Girish Paranjpe, apart from Vemuri.

Does Vemuri’s resignation at Infy suggest that he is in pole position to grab the job? He could have very well thought the road to getting into the driver’s seat is much easier this way, instead of staying on at Infy and living with the uncertainty.

There has been a lot of speculation over Rohan Murthy’s role at Infy and who will be given the mantle to drive IGate. With Vemuri’s exit, this speculation is only going to increase many fold.

Lets wait and watch how things unfold in the coming days and months.

 

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Author:

I am a business journalist by profession and have close watch on equity markets and developments across FMCG, Retail, real estate, auto and information technology sectors in India. When not writing, I am an avid photographer (instagram.com/nachiket.kelkar) and Arsenal FC fan. I also love train spotting.

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