India’s TCS chief to exit amid slowing global tech spending

REUTERS/Francis Mascarenhas

Tata Consultancy Services CEO Rajesh Gopinathan is resigning in an unexpected move to pursue other interests, adding to worries for India’s largest IT services provider amid slowing tech spending and challenges in its key markets.

The company named its president and head of global financial services business K Krithivasan as the CEO-designate, effective March 16, and said he would take over as CEO and managing director in the next financial year, subject to shareholders’ approval.

Krithivasan joined TCS in 1989 and has held various leadership roles at the company.

The development comes as India’s IT industry contends with a challenging macroeconomic environment in its key markets of Europe and the United States, while turmoil in the US banking sector from which it draws the bulk of the revenue poses fresh hurdles.

“Rajesh’s unexpected departure adds volatility when TCS faces slowing tech spend, uncertain macro and hungry competitors and should be a derating driver for stock,” JP Morgan analysts said in a note.

Gopinathan, who was re-appointed last year as the Indian IT behemoth’s CEO until 2027, would leave TCS in September, the company said.

“I don’t expect to see a great strategy change or organisational change coming in the immediate future,” CEO-designate Krithivasan said in a media call on Friday.

Having been with TCS for more than two decades, Gopinathan has held multiple leadership positions, including that of chief financial officer.

Under Gopinathan’s leadership, TCS shares have nearly trebled in value, while revenue almost doubled and profit jumped about 60 percent as of December end.

TCS shares have lost nearly three percent so far this year.

Elsewhere, rival Infosys is facing high attrition at the top, with five senior-level retirements or exits over the last one-and-a-half years.

Krithivasan’s appointment comes amid a slew of leadership changes in the industry. While Cognizant Technology Solutions appointed former Infosys president S Ravi Kumar as CEO this January, Tech Mahindra Ltd recently named another Infosys veteran Mohit Joshi as its chief executive.