Cognizant said last week that the Infosys veteran would replace interim chief for Americas Surya Gummadi and oversee business across the United States, Canada, and Latin America.
Ravi Kumar, who is expected to join in January, will manage over 70% of the company’s business and build efficiencies across major verticals in a tightly contested market, even as macroeconomic headwinds and a tight labour scene threaten margins.
Asked whether Kumar had been hired with visibility into his chances of becoming CEO in the future, Phil Fersht, chief executive and chief analyst at HFS Research, said: “Of course. Brian Humphries [CEO] is openly keen to have a strong succession model in place and clearly sees Ravi Kumar as a potential candidate for his role in the future.”
Cognizant has not responded to ET’s queries on Kumar’s potential role.
In an internal email announcing Kumar’s entry into Cognizant, which ET has reviewed, Humphries underscored the CEO-proximity that Kumar’s role entails: “I believe his leadership will inject a new level of energy and innovative thinking to help accelerate growth. Ravi will also serve as a close partner to me. He is based in New York City and will join the EC, reporting to me…”
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Kumar, as Infosys’ president for six years, had led the Bengaluru-based IT services provider’s global services vertical, with a focus on digital transformation, consulting, Cloud, data, and enterprise package services lines, among others.
Humphries’ mail also pointed to Kumar’s strong “external profile,” meaning his presence on the boards of several organisations: Transunion, US Chamber of Commerce, Board of Governors of the New York Academy of Sciences, Digimarc Corporation, and the Skills Consortium of the World Economic Forum.
For Kumar, who drew the third-highest salary in 2021-22 at Infosys after CEO Salil Parekh and former chief operating officer UB Pravin Rao, the transition to Cognizant would not make sense without a clear route to the top.
“Ravi Kumar would not have moved there if this was not a distinct possibility [of becoming CEO] down the road. Strong leaders need strong successors to drive their organizations forward, and this is a sensational move from Humphries that signals real intent,” Fersht said.
Cognizant, of late, has been wracked by concerns that it was seeing a high degree of exits in its top-deck talent.
Several mid-tier companies, including Mindtree – which had hired Debashis Chatterjee as its CEO from Cognizant – had found its leaders from the software exporter.
With Kumar’s appointment now, and that of Ernst & Young leader Rob Walker as president of global growth markets, recently, Cognizant has sent out a strong signal that it is on the scout for tier I leadership in IT, analysts said.
“I am impressed that Cognizant was able to attract Ravi Kumar. The team has had challenges with attrition and bringing on high calibre individuals over the past few years. This move is significant as it shows that the executive team and the board understand that recruiting top talent will help improve overall recruiting,” Ray Wang of Constellation Research said.
Analysts critical of Cognizant’s delay in bolstering its executive committee leadership say Kumar’s appointment should be seen as a board-level intervention.
Moshe Katri of US wealth management firm Wedbush Securities said: “This is a board-driven action, possibly in reaction to the company’s multi-year underperformance relative to its tier I peers…”
Cognizant reported 31% voluntary attrition in its second quarter, higher than Indian peers. But the company has reiterated that this included people in training, BPO and other segments.
It has cut FY22 revenue guidance twice in a row but shown operating margin improvement in the second quarter.
In line with peers, Cognizant also said on Monday that it would hike salaries by 7-10%.
In the July-September quarter, Indian software exporters have displayed signs of taming attrition – Infosys cut it to 27.1% from 28.4% and Wipro recorded a 30 basis point-cut to 23% – but it is not clear if Cognizant has turned the corner.
Cognizant is set to report its Q3 results on November 2.
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