Vishal Sikka cracks whip at Infosys after poor Q1, one more exits co

After the disappointing April-June earnings that took the sheen off Infosys, CEO Vishal Sikka seems to be moving quickly to fix the gaps. According to a report in The Times of India, Sikka on Monday expressed his disappointment in an email to the employees and also reshuffled the company’s top brass in an attempt to address the concerns. “I am disappointed. Disappointed that our revenue performance was not what we could have delivered, but even more so, that this overshadowed the many strong strides we made on executing our strategy,” the ToI report cited from the email sent by Sikka. [caption id=“attachment_2901784” align=“alignleft” width=“380”]  Vishal Sikka. Reuters[/caption] As per the report, Deepak Padaki, who was chief risk officer and head of strategy has been appointed as chief of mergers and acquisitions, Ritika Suri who headed the Infosys Innovation Fund has is now in charge of large deals, Narasimha Rao Manepalli takes over as head of artificial intelligence platform, Rajesh Krishnamurthy, head of consulting will now work with COO Pravin Rao on strategic initiatives and also bring Design Thinking to clients while Sudhir Jha is vice-president of product management and strategy. Another report in The Economic Times said the company also witnessed one more exit from the top level as Anup Uppadhayay, a veteran who served the company for 22 years, left. Upadhyay was moved from the position of CEO of Infosys BPO to Executive Vice President and Head of Strategic Sales Programme in May. Sikka, who joined the company two years back, had brought about many changes to boost the employee morale and turn the company around. One of the key change was adaptation of Design Thinking - thinking creatively to bring about solutions to business problems - in engaging with clients. The company’s performance had also improved in the last two quarters, with analysts too indicating that the company may have been able to finally find solution to the transition troubles. However, the April-June numbers show that the turnaround may not have happened just yet. The company on Friday posted a 4.5 percent on-quarter fall in consolidated net profit to Rs 3,436 crore for the first quarter of 2016-17 and slashed full-year revenue guidance to 10.5-12 percent in constant currency terms. The consolidated revenue for the quarter was up just 1.4 percent on quarter at Rs 16,782 crore. Most importantly, the attrition rate, which had been falling in the previous two quarters, shot up to 21 percent. What makes this number particularly scary is the fact that the company had taken many steps to stem employee churn. “The numbers are disappointing and they are going to face a challenge getting back to the driver’s seat in the remaining three quarters. It’s not a very encouraging future guidance and we can’t even write this off as a one-off weak performance,” said Thomas George, senior vice president, CyberMedia Research, told Bloomberg. Sikka has attributed the poor show to execution failure in certain sectors. He also said it is no reflection of his strategy. “The wrong response to this, as I have been saying, is a downward spiral – use cheaper and cheaper people and jam them more into projects faster and faster. That journey ends at one place – at zero. The right response is to transform towards innovation,” he told ToI in an interview. Sikka, who took home Rs 49 crore in compensation last financial year, is hardpressed to show that his strategy is indeed working well. Already there have been reports that the founders may not be overly happy with the two-year extension given to Sikka. A report in the Mint in April said that only 23.57 percent of promoter votes favoured the resolution to give Sikka an extension. This is because some of the promoters abstained from voting on this resolution. A senior executive of the company told the newspaper that the lower vote in Sikka’s favour could also be because the promoters are not happy with he 55 percent pay hike he received in February. It is time for Sikka to prove that he indeed deserves it.