Infosys CEO Parekh shrugs off investors’ attrition fears
Ltd’s chief executive officer (CEO) Salil Parekh has reached out to investors to assuage concerns about a string of senior management exits, including that of chief financial officer (CFO) MD Ranganath, assuring them that India’s second largest software services company will strengthen its leadership team and contain attrition.
Parekh, who took over as CEO in January, told analysts that Infosys will hire people from outside to strengthen its account management, large deals and digital teams.
“Mr Parekh is looking to augment leadership through external hires in account management, large deals team and select digital competencies while interventions are under way to contain attrition,” Kotak Institutional Equities analysts Kawaljeet Saluja and Jaykumar Doshi wrote in a September 2 note, after a meeting with Parekh.
Last month, Ranganath, a veteran of nearly two decades at Infosys, abruptly resigned from his position, marking the third senior executive departure at the company under Parekh’s watch. Other than Ranganath, Infosys lost two other top leaders this year — president Rajesh Krishnamurthy and former healthcare business head Sangita Singh.
NEWDELHI:Infosys
“Mr Parekh believes Infosys’s high attrition can be partly attributed to its strong training engine which makes employees an attractive target. Mr Parekh expects attrition to decline in the coming quarters with multiple interventions kicking in, including: timely wage revisions, more promotions and better employee engagement,” the analysts wrote in the note.
Parekh spoke with at least three equity analysts, according to an executive familiar with the development, over the last week as there was growing apprehension on Infosys is struggling to build a stable management team.
“At our meeting with Infosys’s CEO/MD, Mr Salil Parekh, we discussed investor concerns over the stability of the senior management team in the wake of the CFO’s recent resignation and the ability of Infosys to deal with such top-level departures,” JPMorgan Chase and Co. analyst Viju George wrote in a note to investors, dated September 2.
“Our view—we received reassuring messages from the CEO on these and other aspects. Infosys has a very deep management bench as per Mr Parekh, which should help the company deal capably with senior management departures; recent departures of business (vertical) heads and of the chief financial officer should not have a business impact given the experience and relationships that leaders one level below bring to the table and their readiness/ ability to step up as replacements.”