Bengaluru: Suresh Muthuswamy, who ran a business worth nearly $15 billion for Tata Consultancy Services Ltd as chairman of TCS North America, has resigned, marking the biggest executive exit since the country’s largest technology services provider appointed K Krithivasan as its CEO in June last year.
Muthuswamy, who was named chairman of TCS’s US and Canada business in March 2022, resigned earlier this month, according to two executives familiar with the development.
TCS will not have a chairman for the North American region and will now be overseen by Amit Bajaj, president of the North American region, according to a third executive. Bajaj assumed his current role in August 2020.
“We can confirm that Suresh Muthuswamy has decided to leave TCS after a 26-year career with the company,” a TCS spokesperson said.
Mint could not ascertain the reason for Muthuswamy’s departure.
The US and Canadian businesses accounted for 51.1% of the $29.1 billion revenue at Mumbai-headquartered TCS in the year ended March 2024. That means Muthuswamy, who was responsible for strategy, human resources, finance and legal functions in the US and Canada, ran a $14.9 billion business that, as an independent company, would be larger than the country’s third-largest IT services firm, HCL Technologies Ltd.
While HCL Technologies closed with $13.3 billion last year, Infosys Ltd closed the previous fiscal with $18.56 billion in business.
The journey of Muthuswamy
In April 2022, TCS promoted Muthuswamy as chairman of the North American region after Surya Kant, another veteran of the company’s decades, retired. Under Kant, TCS’s North American business grew from $1 billion in 2006 to $12.5 billion at the end of March 2022.
Muthuswami’s exit is surprising because between April 1, 2022 and March 31, 2024, TCS’s North American business grew 14.5%, faster than the company’s overall revenue growth of 13.1% in dollar terms . During this period, TCS’ Americas business also grew faster than Infosys’ growth of 11% in the US-Canada region. HCL Technologies and Wipro Ltd do not disclose US business.
But Muthuswamy’s work saw the cancellation of a mega contract (the value of the work was more than $1 billion). Last year, Transamerica Life Insurance Co. terminated a 10-year deal worth $2 billion, five and a half years after the US arm of Dutch insurer Aegon NV awarded the contract to TCS in 2018.
In June last year, Krithivasan took over as CEO of TCS following the sudden departure of Rajesh Gopinathan in March. Krithivasan has managed the company well so far: TCS posted revenue growth of 4.1% last year. Excluding 0.7% growth in the pandemic-hit 2021, this was TCS’s slowest full-year growth since it went public in 2004. Still, TCS’s 4.1% growth was more better than Infosys’ 1.9% rise. TCS’s performance also stood out as Cognizant Technology Solutions Corp.’s earnings. and Wipro Ltd shrank. Finally, TCS also finished with an industry-leading operating margin of 24.6% last year.
Under Krithivasan’s watch, TCS shares rose 35.7%, lagging rivals Infosys and HCL Technologies. Shares of Infosys, HCL Technologies and Wipro have returned 41.2%, 45% and 27% respectively between June 1, 2023 and August 23 this year.
Unlike his predecessor Gopinathan, who was ousted because of his management style – called brusque by those who worked with him – Krithivasan is a friendlier boss. Except for a few changes, it avoids making too many changes.
However, TCS saw some departures, although some of the outgoing executives retired.
Late last year, Dinanath Holkar, head of TCS’ partner ecosystems and alliances, resigned. In October, Chief Technology Officer Ananth Krishnan retired. In May, the company’s chief operating officer, Natarajan Ganapathy Subramaniam, retired after reaching 65, the company’s mandatory retirement age.