In June this year, NR Narayana Murthy returned to Infosys as executive chairman in an attempt to arrest the slide in the performance of the IT major. Over the last three years, Infosys had been losing out on big deals, the lack of which had pressured both its top line and margins—in FY13, the firm’s ebitda margin slipped to a new low of 26.5%, a drop of 620 basis points. So muted was the company’s revenue guidance for FY14 at 6-10%, it seemed Infosys had given up on itself. Murthy’s return, it was believed, would rejuvenate the business in a challenging environment and boost employee morale, something that CEO SD Shibulal clearly wasn’t able to do. Even at that time, however, this newspaper had pointed out that while Murthy might succeed in motivating a large chunk of employees, there was always the risk that his re-entry might prompt senior executives to quit the firm in search of better opportunities.
While it would be wrong to presume that Ashok Vemuri, head of the Americas, global manufacturing and a board member, has resigned because he didn’t see himself as CEO with Murthy back at the helm, that is a possibility. Vemuri was widely seen as a contender for the CEO’s post after Shibulal stepped down, and he will be badly missed; of all the recent exits—Basab Pradhan, Sudhir Chaturvedi and others—Vemuri’s is the most high profile and the costliest for Infosys. With this, Murthy’s challenge just got bigger and, given that age is not on his side, it will be an uphill task for him to regroup the team at Infosys. The re-jigging of the organisation that took place in 2011 doesn’t seem to have worked—analysts point out how responsibilities between Vemuri and BG Srinivas were swapped just 10 months into the reorganisation; also, Infosys has all along believed in promoting insiders for senior positions, a good strategy since it encourages executives to stay on. But, for whatever reason, it doesn’t seem to have worked, with some amount of complacency setting in. That’s why, while it may bruise a few egos, Murthy’s best