Amid Low Attrition, IT Companies Witness Massive Churn in Top Leadership in 2023
A wave of resignations has continued at the leadership of huge IT organizations. Richard Lobo, a former executive vice president of Infosys and head of human resources, submitted his resignation on Friday.
The news comes just two days after Charles Salameh, another former top executive of Infosys, was named the new CEO of Sangoma Technologies Corporation, a Canadian CaaS (Communication as a Service) provider. Several senior-level executives at leading IT firms have left this year. The departures of former TCS CEO Rajesh Gopinathan and former Infosys presidents Ravi Kumar and Mohit Joshi have received the most excellent attention.
While Ravi Kumar became the CEO of Cognizant at the beginning of the year, Mohit Joshi was named CEO designate of the smaller rival Tech Mahindra in June.
Similarly, Infosys’ previous Chief Information Strategy Officer (CISO), Vishal Salvi, left the organization last month to become the new CEO of cybersecurity startup Quickheal.
This year, new CEOs took over at organizations like Cyient Services, Xoriant, Encora, R Systems, Citius Tech, and eClerx. Large IT firms, including Infosys, Wipro, HCLTech, and Tech Mahindra, have lost these new CEOs.Nine of them have become CEOs of other IT companies, even though several have risen to higher positions in other businesses.
Except for K Krithivasan, the new CEO of TCS who was promoted internally, nine other new CEOs who took charge are outsiders who quit their positions in tier-1 IT companies.
Amid falling attrition in the IT industry, there is paradoxically a chain of shuffling and reshuffling at the leadership level of the industry. As per Jefferies, the average deterioration for the top five companies continues to be moderate and has fallen to 13% in the June quarter of FY24 from 23% a year earlier.
“Nine top executives from Infosys, HCLTech, and Wipro have left in the last seven months,” said Pareekh Jain, founder of Pareekh Consulting, “to become either CEO of global IT companies or smaller Indian rivals.”
Jain said that six new CEOs, including those of Sonata and Birlasoft, joined the IT sector in 2022. However, ten new CEOs have already assumed leadership this year. This is not meant to imply that executives are leaving their positions merely to take over as CEOs of other businesses. Additionally, they are departing and joining as more senior executives in other companies.
Like Gurvinder Sahni, who left Wipro after 20 years to become the chief marketing officer of Persistent Systems in May of this year.
The new CEOs are also driving changes in their organization. Six women were recently named Senior Vice Presidents (SVPs) at Cognizant, an Indian-based IT company headquartered in New Jersey. A week ago, K Krithivasan, the new CEO and MD of TCS, the leading Indian IT company, said that the company would be divided into business units based on industrial categories and geographical regions.
Tech Mahindra’s CEO-designate Mohit Joshi is touring the company, interacting with clients and staff, and learning more about the business. Still, there are rumours that a new COO is due to join the company.
Everest Group CEO Peter Bendor-Samuel stated, “An interesting secular factor is pushing the demand for new CEOs and their consequent organizational adjustments. The industry is at a turning point as it transitions from the legacy + digital modernization stage to a digital run phase. Due to this new reality, Corporations are forced to reconsider their organizational and go-to-market strategies. In the case of many of these corporations, the boards are looking for new and fresh leadership to bring about these changes.
Jain continued by saying that a domino effect resulted from top employees abandoning their jobs. When an immediate supervisor leaves a firm, the employees who were closest to him may occasionally find themselves in unfamiliar territory. There have been internal changes at TCS, even though the new CEO is an insider. However, because the CEOs of Cognizant and other companies are outsiders, we observe outside recruiting in addition to some internal rearrangement.
In 2023, a remarkable phenomenon has been observed in the Information Technology (IT) sector. While the overall attrition rates have been historically low, there has been a surprising churn in top leadership. This unusual event, stirring in the heart of one of the world’s most dynamic industries, provides an intriguing backdrop to understanding the complexities of modern organizational management and strategies.
First, it’s essential to understand why the attrition rate is currently so low. Several factors have contributed to this unprecedented phenomenon.
For one, remote working has become the norm due to the long-term effects of the COVID-19 pandemic. This development has enhanced flexibility in work timings and better work-life balance for employees, contributing to higher job satisfaction.
Moreover, the prolonged pandemic has led to a sense of job security in the IT sector, which has proven resilient and even thriving in these uncertain times. Therefore, fewer employees choose to leave their current positions, reducing attrition rates.
However, this low attrition rate doesn’t mean the sector is stagnant—quite the opposite. The significant churn in the top leadership of IT companies illustrates a dynamic and ever-evolving landscape.
Across numerous IT companies, 2023 has been marked by a significant turnover in top leadership. This leadership churn does not indicate any fundamental problems in these companies but reflects shifting strategies and evolving market demands.
Digital transformation, artificial intelligence, cybersecurity, data analytics, and quantum computing are some significant areas where IT companies are currently focusing. Companies bring new leadership with specific expertise and fresh perspectives to drive growth and innovation in these areas. Simultaneously, existing leaders, many of whom have been with their companies for decades, are finding new opportunities to guide startups and emerging tech firms. This trend has led to a fluid exchange of leadership talent between established IT giants and more recent market entrants.
While this high-level churn might concern some, many experts argue it could be a healthy sign for the industry. It’s a sign of adaptability, with IT firms demonstrating their readiness to embrace change to meet evolving market needs.
However, the transition must be handled carefully to ensure continuity and stability. The new leaders must quickly acclimate to the company culture, operational norms, and business strategy while bringing in their unique contributions.
Furthermore, with the exit of long-time leaders, there’s a risk of losing valuable institutional knowledge. To mitigate this risk, companies must have robust knowledge transfer processes and cultivate a continual learning and adaptation culture.
The year 2023 is a fascinating period for the IT sector. Despite low attrition, the significant churn in top leadership across various IT companies indicates an industry in flux.
As the industry evolves, the leadership churn will likely bring fresh ideas and diverse perspectives and drive further innovation. While the shift is complex, it’s also an opportunity for growth and rejuvenation for the IT industry.
