What Is Brewing At Infosys!


With Donald Trump’s swearing in, and the skepticism surrounding his America First, almost to the point of suffocating the idea of laissez-faire, and then the doom of automation rendering thousand’s of low paying jobs out of picture, the Indian IT sector heads into one of the grimmest period of their history, with a high tide awaiting at each nook and corner of this ever-changing world. And there is Infosys!

It’s almost gray clouds ahead for the $10 billion, Indian born and bred company which has always been a techie’s dream. Rumour mills have been busy churning out snippets of the alleged friction between the founders and the present executive body which has led to business experts predicting doom for the company. If reports are to be believed, the founders have explicitly stated that their issues have their foundations in the core values of the company; namely governance, principle, value, and transparency. But sources close to Sikka have stated otherwise, citing that the co-founders still find solace in a business model breathing its last existential gasp, and their perversions about whether aggressive acquisitions would result to into better growth numbers. Apart from this, there is a general belief that the old guard is reluctant to pass on the legacy of the company they built from scratch, and Vishal Sikka happens to be the first non-promoter of the company.

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The first signs of schism appeared about a year ago, when Punita Sinha, the wife of the present Union Minister for Civil Aviation, Jayant Sinha was appointed as an independent director to the board. Narayan Murthy, the co-founder and the first CEO of the company had abstained from voting, stating that Infosys had never in its history had appointed a spouse of a currently serving minister. His grounds were soon dismissed by Sikka, who had stated that it was her experience as a fund manager at Blackstone and Oppenheimer that had warranted her eligible for the post in hand.

Apart from that, another major friction point appeared at the compensation to the CEO. Infosys had always believed in Compassionate Capitalism, but there had been an almost 55% hike in the compensation to Sikka, that too at a time when the average salary hikes revolved between 6% to 8%. Murthy, at this juncture, had stated that this decision had put him in a moral dilemma, and he along with three other co-founders(Krish Gopalakrishnan, S D Shibulal, and K Dinesh), had abstained from voting.Only Nandan Nilekani, also a co-founder and who succeeded Murthy as chairman, voted in favour of the resolution.

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Under Sikka, Infosys aspires to be $20 billion, double of what its current revenues are. It also aspires to be holding at a 30% operating margin, and a $80,000 revenue per employee by 2020.Out of the $20 billion, $16.5 billion is to come from existing business, $1.5 billion from acquisitions and $2 billion from new businesses. But if the present state of affairs is to be believed, this seems hardly feasible, unless Infosys can mend their act.

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