Tata Consultancy Services Managing Director and Chief Executive Officer Rajesh Gopinathan will step down to pursue other interests, the IT behemoth said in a statement on Thursday.
K Krithivasan, who heads the company’s banking, financial services, and insurance arm, has been nominated as the CEO-designate by the company's board, effective immediately. He will take over the post in the next financial year from Gopinathan, who will stay with TCS until September 15.
The move comes as the Indian IT industry gears up for a slowdown in client spending in key markets such as the United States and Europe amid economic uncertainties.
Gopinathan, who completed six years at the helm of India’s largest software services exporter in January, was reappointed as CEO till 2027, raising some questions about the timing of the departure.
"For the last few months, he was less visible on the market. However, one never thought he would step down. It is easy to infer that all is not well. TCS has been delivering decent results since he joined. There must have been some issues of alignment that could not be resolved," Aditya Narayan Mishra, the CEO of CIEL HR Services, told DH.
Industry observers said Krithivasan’s appointment made sense.
“TCS draws the highest revenue from the BFSI vertical as compared to any other global IT services company. So, the elevation of BFSI head as the next CEO is logical in the current environment,” Pareekh Jain, the founder of Pareekh Consulting, told DH.
Krithivasan will go through a transition with Gopinathan.
“I have thoroughly enjoyed my exciting 22 year tenure at TCS. The last six years of leading this iconic organisation have been most enriching and fulfilling, adding over $10 bn in incremental revenues and over $70 bn increase in market capitalisation,” outgoing CEO Gopinathan said.
Krithivasan, a Madras University and IIT Kanpur graduate, joined TCS in 1989. He has risen through the ranks to serve in various leadership roles in delivery, customer relationship management, large program management and sales.
“No disruption is expected due to (the) stepping down of current CEO, Rajesh Gopinathan, as the leadership bench is very deep at TCS,” Jain remarked.
The new CEO should focus on finding ways to improve succession-planning and innovating for future growth, according to CIEL HR’s Mishra.
The Indian technology sector is expected to grow at a more modest 8.4 per cent to $245 billion in FY23, according to Nasscom, after seeing explosive growth during the pandemic. It had grown at 15.5 per cent -- its best in a decade -- to $226 billion in FY22.