Tata Consultancy Services (TCS) CEO Rajesh Gopinathan is stepping down in an unexpected move to pursue other interests, raising concerns for India’s largest IT services provider amid slowing technology spending and challenges in its core markets.
The company named its president and head of global financial services business K Krithivasan as CEO-designate effective March 16 and said he will take over as CEO and managing director in the next financial year, subject to shareholder approval. Krithivasan joined TCS in 1989 and held various leadership roles in the company.
The development comes as India’s IT industry grapples with a challenging macroeconomic environment in its core markets of Europe and the United States, while turbulence in the US banking sector, from which it derives most of its revenue, poses new hurdles.
“Rajesh’s unexpected exit adds to volatility as TCS faces slowing technology spending, uncertain macroeconomic conditions and hungry competitors, and should be a driver of lower share prices,” JP Morgan analysts said in a note.
Gopinathan who was reappointed as CEO of the Indian IT giant last year until 2027 would leave TCS in September, the company said. “I don’t expect to see a big change in strategy or organizational change in the near future,” CEO-designate Krithivasan said in a media call on Friday.
After more than two decades at TCS, Gopinathan has held several senior positions, including that of Chief Financial Officer. Under Gopinathan’s leadership, TCS shares nearly tripled in value, while revenue nearly doubled and profit jumped about 60% by the end of December.
TCS shares, which have lost nearly 3% this year, were down 0.3% at 10:31 IST. Elsewhere, rival Infosys is facing high attrition at the top, with five senior-level exits or departures in the past one-and-a-half years.
Krithivasan’s appointment comes amid a series of leadership changes in the industry. While Cognizant Technology Solutions appointed former Infosys president S Ravi Kumar as CEO in January this year, Tech Mahindra Ltd recently appointed another Infosys veteran Mohit Joshi as its CEO.