Vishal Sikka resignation sends Infosys stocks reeling
The management of Infosys is racing against time to convince the shareholders that the company is still in good hands after the abrupt resignation of Vishal Sikka.
Infosys Chief Executive Vishal Sikka has resigned due to continuous pressure brought by long-standing conflict with ex-chairman Narayana Murthy. The news delivered a blow to the company and its shares went down by as much as nine percent or $3.5 billion.
According to BBC News, the issue, apparently, stemmed from an increase of Sikka’s pay and sizable severance pays awarded to other employees. In a lengthy resignation letter, Sikka covered a wide range of topics as he explained why he left. However, a point of emphasis for him is that the allegations are “personal attacks.” He also noted that the company is reeling from challenges in the IT industry, most especially in the U.S. which is considered its biggest client. Since President Donald Trump ordered stricter policies on H1-B visas, it affected Indians working in the tech industry.
He also noted that the company is reeling from challenges in the IT industry, most especially in the U.S. which is considered its biggest client. Since President Donald Trump ordered stricter policies on H1-B visas, it affected Indians working in the tech industry.
During his tenure, Sikka has pushed the company towards innovation and veered away from being a mere service provider. The Infosys board lauded Sikka’s efforts when he headed the company, increasing revenues and lessening employee attrition. Under Sikka, Infosys was able to achieve 20 percent shares increase and market value surged to $4.6 billion. Many experts are expecting Sikka’s departure as the start of the demise of Infosys.
Per The New York Times, Murthy denies the accusation that he is the reason why Sikka resigned. He stressed that he only wanted to maintain the company’s governance standards.
In a report published by Money Control, it revealed that Murthy was the founder and longest-serving CEO of the company from 1981 to 2002, which explains the influence he still has in Infosys. While the tech company is trying to minimize the impact of Sikka’s resignation, the damage clearly has been done. It remains to be seen if the new leader can revive the company.
Sikka will remain as the company’s executive vice chairman while CEO U. B. Pravin Rao is expected to occupy the vacated position on an interim basis. As the vice chairman, he will receive an annual salary of $1.
Featured photo from Wikimedia Commons. CC BY-SA 2.0via
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