Vishal Sikka’s Resignation from Infosys and What Lies Ahead

Vishal Sikka resigns as CEO of Infosys after bitter dispute with founder Narayana Murthy.


The news of Vishal Sikka’s resignation from the post of Managing Director and CEO of Infosys tumbled the company’s share prices by 9.5 per cent. The 50-year-old tech executive, who joined Infosys in 2014, cited ‘continuous distractions’ and ‘malicious personal attacks’ as his reasons for quitting India’s second largest services firm.

“The distractions that we have seen, the constant drumbeat of the same issues over and over again, while ignoring and undermining the good work that has been done, take the excitement and passion out of this amazing journey. Over the last many months and quarters, we have all been besieged by false, baseless, malicious and increasingly personal attacks. Allegations that have been repeatedly proven false and baseless by multiple, independent investigations,” read the unconventional and lengthy resignation letter he wrote to his board colleagues and also posted on his blog.

The Board Supported Sikka 

Sikka will now be the executive vice-chairman of the company. A press release issued by the company attached Sikka’s resignation letter and stated, “The succession plan for appointment of a new Managing Director and Chief Executive Officer has been operationalized by the Board and a search for the same has been commenced.”

In a separate media release, the board supported Sikka and said that founder and former-chairman Narayana Murthy’s “continuous assault” was the main reason for his resignation.

Murthy, who responded to the letter from Sikka and the board, expressed anguish over the board’s allegations and said via an emailed statement to the media that he is not seeking “any money, position for children, or power,” and that he will respond to the allegations in the right manner at an appropriate time. The board responded to the email, which was promptly and widely picked up by the media, saying that “Murthy’s letter contains factual inaccuracies, already-disproved rumors and statements extracted out of context from his conversations with Board members.”

Murthy’s Previous Email

Murthy wrote an email on August 9 in which he mentioned that Sikka was ‘not a CEO material’, according to a Mint report.

“All that I hear from at least three independent directors, including Mr Ravi Venkatesan (co-chairman), are complaints about Dr Sikka. They have told me umpteen times that Dr Sikka is not a CEO material but CTO material. This is the view of at least three members of the board, and not my view since I have not seen him operate from the vantage point of an Infosys board member,” Mint quoted Murthy as saying.

Company insiders believe that Murthy was annoyed with the hike in salaries of the top management and had lambasted Infosys for alleged lapses in corporate governance in last one year.

Business experts say that Sikka’s exit did not come as a surprise. Speaking to Economic Times, Sudin Apte, Research Director & CEO at the advisory and research firm Offshore Insights, said that there were rumors last week about the ‘pressure being built on Sikka, especially the investor pressure and by the founders’. The question though remains as to why the board did not act in time to prevent such damage and stood by Sikka to prevent his exit.

What Next for Infosys

Sikka will continue to report to the Board and has assured it of his assistance in smooth transition of his responsibility.  He will hold office until the new permanent CEO and MD takes charge, which should be no later than March 31, 2018. He will receive a salary of $1 in his new role as executive vice chairman.

Chief Operating Officer Pravin Rao has taken over as the interim CEO, but for Infosys the real challenge lies in finding the right person who can run the massive operations and lead the company through the ‘innovation’ challenge confronting the IT industry. Infosys has been grappling with issues like crackdown on H1-B visas as profits come under pressure since the US remains a significant market for the company.

Read Vishal Sikka’s Resignation Letter

Read Infosys Press Release 

Murthy’s Response on 18th August 2017

Narayan Murthy’s August 14 Letter 

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