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Attrition in top - Infosys' big worry

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DQI Bureau
New Update

While the Indian IT industry faces challenging times - like downward spiral in enterprise IT spending, the impending US Immigration reforms, the new H1B visa guidelines et al are big cause for worry to all the leading players in the fray. For some companies, beyond these macroeconomic forces- the internal re-organizations are also hurting their prospects in the market. Take the case of Infosys which in the recent times is seeing a series of serious management churn.

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What will be more worrying for Infosys is the fact that these top executives are joining its arch rivals. You may call it poaching or in a more dignified manner- ‘pursuing other career opportunities'- as usually the exit media releases say regarding these outgoing executives.

As we look at Infosys, the exit of five high level executives since June tells a gloomy story. When the company increasingly came under the public scrutiny early this year and in the midst of ambiguity came the news that the company's co-founder N.R.Narayan Murthy, who returned to arrest Infosys from going down further.

But while the markets rejoiced on the return of Murthy, some of the top executives thought the other way. Among the top management exits in the recent times, Sales Head, Basab Pradhan resigned in June to join a startup. Financial Service Head, Sudhir Chaturvedi, resigned in July, to join NIIT technologies. In August, Ashok Vemuri, who was supposed to succeed SD Shibulal as CEO, resigned to join rival company, iGate. Presently, two senior executive of the company's Business Process Outsourcing, also left for greener pastures.

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The biggest worry for Infosys right now is to retain its client base and sure it's indulging in lots of confidence building measures. But more than that, it needs to arrest the attrition among the top.

But as we ponder about what ails Infosys at the same time questions are also being asked - Is the company becoming more centralized in terms of decision making and is it converging too much around Murthy? For instance Murthy recently implemented a series of changes including centralizing decision-making, cost-cutting at overseas locations and assigning additional responsibilities to senior executives. While Murthy's son Rohan was roped in as his executive assistant, but his role increasingly appears much more larger and gives a sense he is the CEO waiting in the wings.

This also raises questions on the company's corporate governance practices. Industry experts say that Infosys is now making an extra effort to talk to both clients as well as employees about the recent changes and restructuring to tame potential uncertainties. Will it really connect is the key question. And the recent exits at the top were not a good sign.

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