K Krithivasan is set to become the next CEO of Tata Consultancy Services (TCS), India’s largest IT services company. He will succeed Rajesh Gopinathan, whose resignation as chief executive and managing director was announced on Thursday. The board appointed Krithivasan as CEO-designate with effect from March 16.
Subject to shareholder approval, he will take over as CEO and Managing Director in the coming fiscal year. TCS stated that the effective date of his succession will be communicated in due course.
Gopinathan, 52, has been with TCS for 22 years and served as CEO for six of those years. According to the company statement, his last day will be September 15. He was reappointed for a second five-year term beginning in March 2022. Krithivasan is currently president and global head of the banking, financial services, and insurance (BFSI) business group, which accounts for the majority of the company's revenue (31.5%). Krithivasan began his career at TCS in 1989.
“This is certainly a surprise as the company’s performance has been strong under Gopinathan,” said Phil Fersht, founder of IT research firm HFS Research. “Krithi has a very strong track record leading the BFSI business and has 33 years in TCS, and will be a very solid presence to take things forward for the firm… Krithi’s appointment to the top leadership role spells continuity.”
N Ganapathy Subramaniam (NGS), chief operating officer of TCS, is also set to retire in 2024.
Krithivasan will take over at a time when the demand for technology projects is stressed due to macroeconomic concerns and geopolitical tensions. After growing at a frenzied pace due to pandemic-driven spending on digitisation, IT spends have been sharply scaled back as organisations are dealing with the uncertainty in the global economy. According to Gartner estimates, growth of tech spending is expected to moderate to 2.4% compared with 5.1% estimated last year for 2023.
Companies are banking on their ability to mine large deals focussed on driving cost efficiencies to tide over the crisis.
It makes sense to have a market-facing candidate as the new CEO in the next phase of the company’s growth, said Pareekh Jain, an outsourcing advisor. “It is important from the employee, clients and shareholder perspective that the CEO transition goes smooth” as that from N Chandrasekaran to Gopinathan in 2017.
During Gopinathan’s tenure, the stock rose 160%. He was elevated from the role of chief financial officer to CEO in February 2017 after Chandrasekaran was appointed chairman of Tata Sons.
In his last interview, which was to ET in December, Gopinathan had reiterated his goal to double revenue to $50 billion by 2030. He also led a major restructuring of the organisation in April 2022 to make it more customer focussed. The previous reorganisation at TCS was by Chandrasekaran in 2009.
At 46, Gopinathan had been one of the youngest CEOs at the company. He joined it in 2001 from Tata Industries and worked to drive TCS’ newly established e-business unit in the US.
Gopinathan said he had “thoroughly enjoyed” his 22-year tenure at TCS.
“It has been a pleasure working closely with Chandra, who has mentored me through this entire period,” he said in a statement. “The last six years of leading this iconic organization have been most enriching and fulfilling, adding over $10 billion in incremental revenues and over $70 billion increase in market capitalization.”
He took the decision to resign after reflection and in discussion with the chairman and the board.
“We decided that the end of this fiscal year is a good time for me to step aside and pursue those (other) interests,” he said. “Having worked with Krithi over the last two decades, I am confident that he is best positioned to take TCS to greater heights along with the leadership team. I will be working closely with Krithi to give him all the support that he needs.”
"I have had the pleasure of working with Rajesh for the past 25 years," Tata Sons and TCS chairman Chandrasekaran said. Throughout this time, Rajesh has consistently demonstrated exceptional performance in a variety of roles, including his previous role as chief financial officer."
Krithivasan has held various leadership roles at TCS, including delivery, customer relationship management, large programme management, and sales. Krithivasan is also a member of the boards of TCS Iberoamerica, TCS Ireland, and TCS Technology Solutions AG. He graduated with honours from the University of Madras with a bachelor's degree in mechanical engineering and from IIT Kanpur with a master's degree in industrial and management engineering.