His letter was brutally honest, emotional, saying that complications of “continuous noise” has hurt him and the company and that is why he has chosen to resign as CEO of Asia’s #2 software exporter. After many months of back-and-forth with the board and, particularly, a handful of founders (led by board chair N R Narayana Murthy).
Sikka was a big part of the company’s 25 percent revenue growth, since taking the helm only three years ago. For now, though, the 50-year-old technologist will step down to the vice-chairman role until the company can find a successor.
Of course, Sikka might have the worst timing for this: the industry, as a whole, is having trouble making the very difficult but very necessary transition to digital services and data-based computing. Both Infosys and its largest rival—Tata Consultancy Services Ltd—also stand to face a US administration that is putting the pressure on work visas; work visas which these companies have relied upon to serve important American clients, in the past. The biggest challenge facing Sikka, though, has been to manage the grandiose expectations of the Indian company’s eponymous founders.
If you are not aware of this “noise” Sikka refers to a yearlong turmoil with a billionaire who had accused the company he cofounded of several governance failures. As a matter of fact, in a statement Infosys blamed Murthy, specifically, for personally attacking Sikka; most recently in an leaked email which claims Sikka was more chief technology officer material than having the chops to be the CEO.
In the statement, Infosys says: “Murthy’s continuous assault, including this latest letter, is the primary reason that the CEO, Dr. Vishal Sikka, has resigned despite strong board support,” noting that Murthy’s letter is rife with “factual inaccuracies, already-disproved rumours, and statements extracted out of context from his conversations with board members.”
In response, Infosys said: “The board understands and acknowledges Dr. Sikka’s reasons for resignation, and regrets his decision. The board denounces the critics who have amplified and sought to further promote demonstrably false allegations which have harmed employee morale and contributed to the loss of the company’s valued CEO.”
With that, then, shares of Infosys fell as much as 13 per cent on Friday, sliding the company’s market value down $3.5 billion. Prior to this plummeting, the company had been on a steady climb of 21 percent throughout the course of Sikka’s 3-year tenure; which had outperformed the 4 percent decline of rival CS.