Infosys Americas head Sandeep Dadlani quits in setback for CEO Sikka

Sandeep Dadlani, the head of Americas and global head of manufacturing and retail for Infosys, has resigned, in a setback for chief executive Vishal Sikka.

On Thursday night, Infosys named two executives – Karmesh Vaswani as the Global Head for Retail, CPG & Logistics (RCL) and Nitesh Banga as the Global Head of Manufacturing – to replace Dadlani.

Dadlani, who was among the four presidents at Infosys, was managing nearly a third of India’s second-largest software exporter’s $10.2-billion revenue. He joined Infosys in 2001, and specifically the retail industry vertical in 2003 when it stood just at $70 million, the company said on its website. Dadlani resigned on Thursday, a company spokesperson said.

 

Infosys earns 65 per cent of its revenue from the US and Dadlani’s exit comes at a time when Sikka is struggling to revive large deals in its main market to show higher growth. Dadlani joins a group of nearly ten senior executives who have quit Infosys since Sikka took over in 2014.

Since taking over as CEO, Sikka has tried to push for higher growth — promising to achieve $20 billion in revenues by 2020, with operating margins of 30 per cent, and employee productivity of $80,000.

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However, Sikka has underestimated the challenge, said Ravi Venkatesan, co-chairman of Infosys, on Friday. In an interview with Times of India, he said, “…Very frankly, all of us have underestimated the cultural challenge during this whole transformation.”

The information technology (IT) services industry is witnessing turbulence globally. Clients are shifting technology spends towards digital and cloud, thereby increasing the need for local consultants to work with them instead of sending projects offshore. Automation is also taking over low-level maintenance and testing jobs and there is growing protectionism for local jobs in developed economies.

While attempting to steer Infosys towards becoming a software and services company, Sikka has increased the focus on artificial intelligence and automation. The company claims that it has been able to arrest the downslide it was witnessing before Sikka took over.

While business challenges remain, Sikka has also faced criticism for falling corporate governance standards in the company, with Infosys founder N R Narayana Murthy leading the charge. Murthy has questioned the severance pay given to former chief financial officer Rajiv Bansal and forced the company to reiterate its commitment to integrity and upholding governance norms.

Infosys has maintained that the public spat with Murthy had caused distractions. “Negative media coverage and public scrutiny may divert the time and attention of our board and management and adversely affect the prices of our equity shares and ADSs,” the company claimed in its filings to the US Securities and Exchange Commission.

ALSO READ: Infosys says activist shareholders are a risk factor in SEC filing

Last year, Infosys had to cut its forecast twice from double-digit growth to finally register 7.4 per cent growth in revenue, amounting to $10.21 billion.

On Friday, Infosys admitted that it cannot achieve the $20 billion revenue target by 2020 set by Sikka. Likewise, Sikka’s compensation will also be revised, Ravi Venkatesan, co-chair of Infosys told the Times of India.

Infosys Americas head Sandeep Dadlani quits in setback for CEO Sikka