Infosys Technologies on Saturday announced top management changes linked to the retirement of Chairman N R Narayana Murthy,as India’s No. 2 software services exporter struggles to meet growth expectations.
Infosys named SD Shibulal,a founder of the company and currently its chief operating officer,as chief executive officer,and board member KV Kamath as its new non-executive chairman of the board.
Both appointments will become effective August 21,following a couple of recent exits by directors from the board of the Bangalore-based firm.
Murthy,who is due to retire in August,will become chairman emeritus,while current Chief Executive Officer S. Gopalakrishnan will become the company’s executive co-chairman.
Infosys,which is seen as a trend-setter for India’s near-$60 billion outsourcing sector,is battling aggressive competition from larger rival Tata Consultancy Services Ltd and Cognizant Technology whch are steadily chipping away at its market share.
Global rivals IBM and Accenture also compete directly with Indian firms such as Infosys.
Analysts have said the management announcements will put an end to uncertainty that has surrounded the company since talk of the change began last year and will allow the firm to focus on boosting growth.
Shibulal’s appointment as chief executive is in line with Infosys’ practice of giving a member of its founding group a shot at running the company,which was set up by Murthy and six fellow engineers in 1981.
Shibulal takes over from Gopalakrishnan,who in turn replaced Nandan Nilekani,who left the company in 2007 to take charge of the UID project. Nilekani was made chief executive after Murthy stepped aside to become chairman.
Infosys will appoint three internal executives to its board by June,incoming Chairman Kamath told reporters at a press conference in Bangalore.
Kamath is also the non-executive chairman of ICICI Bank,India’s second-largest bank.
Nasdaq-listed Infosys has missed analysts’ profit estimates for three of the last four quarters and in April forecast a lower-than-expected annual sales outlook on slower client spending for the year ending March 2012.
It also expects a near 300-basis point decline in operating margins for the year,hurt by wage hikes and currency moves.
Infosys’ human resources chief T.V. Mohandas Pai,seen as the one executive outside the founding group with a chance of becoming chief executive,quit the firm earlier in April.
On the same day,K. Dinesh,one of the six engineers who founded Infosys along with Murthy,said he would retire.
The Infosys changes come on the heels of a surprise moves earlier this year by third-ranked rival Wipro Ltd to replace its joint CEOs with company veteran T.K. Kurien and reorganise its key IT outsourcing business to rev up growth.
Infosys shares,which the market values at about $38 billion,have fallen 15.6 percent this year,worse than the over 6 percent fall in the wider market.