Rajesh Gopinathan has decided to resign as the managing director and chief executive officer at Tata Consultancy Services (TCS). His resignation will come into effect from September 15.

The sudden announcement was made through a regulatory filing to the bourses late on Thursday evening. It wasn’t immediately clear whether Gopinathan was leaving for an assignment outside the Tata group.

Gopinathan, who completed six years as CEO of the Indian IT behemoth in January, was reappointed as CEO till 2027 last year.

The country’s largest IT services firm named 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 shareholders’ approval.

Krithivasan had joined the company in 1989, TCS said, adding that he had held various leadership roles in his long career. He currently heads the banking, financial services and insurance (BFSI) vertical.

“Rajesh Gopinathan has decided to step down from the company to pursue his other interests. The board of directors has considered his request and accepted the same. Gopinathan will continue with the company till September 15 to provide transition and support to his successor,’’ TCS said in a regulatory filing.

“I have thoroughly enjoyed my exciting 22-year tenure at TCS. It has been a pleasure working closely with Chandra, who has mentored me through this entire period. The last six years of leading this iconic organisation have been most enriching and fulfilling, adding over $10 billion in incremental revenues and over $70 billion increase in market capitalisation,” Gopinathan said.

Tough times

The change at the top of the country’s largest IT services provider comes at a time the industry has been going through a torrid phase in its key markets in the US and Europe which have been pitch forked into a challenging macro-economic environment as monetary authorities mull interest rate hikes to cool raging inflation without impeding the pace of growth and triggering a crisis in the banking industry after the collapse of a few small but significant banks in the US that lend to the companies in the digital space.

Market circles do not rule out the possibility of a kneejerk reaction to the news of Gopinathan’s resignation at the bourses on Friday. They pointed out that one of his hallmarks was a steady performance recorded by TCS despite various challenges, and that his successor will have big shoes to fill.

Gopinathan is bound by a provision in his contract that requires him to give six months’ notice when resigning. There is no separate provision for payment of severance pay.

In the year ended March 2022, Gopinathan earned a total remuneration of Rs 25.76 crore, according to the annual report for the year.

Gopinathan was elevated to the role of CEO in February 2017 after serving as the chief financial officer since 2013.

Krithivasan holds a bachelor’s degree in mechanical engineering from the University of Madras and a master’s degree in industrial and management engineering from IIT Kanpur.

Shares of TCS on Thursday ended largely unchanged at Rs 3,184.75 on the BSE. At this close, it had a market cap of Rs 11,65,316.39 crore.