TCS’s North America head Muthuswami quits

Bengaluru: Suresh Muthuswami, who was overseeing almost $15 billion worth of business for Tata Consultancy Services Ltd as chair of TCS North America, has resigned, marking the biggest executive departure since the country’s largest technology services provider named K Krithivasan as its chief executive in June last year.

Muthuswami, who was appointed chair of TCS’s business for the US and Canada in March 2022, resigned earlier this month, according to two executives privy to 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 took over his current role in August 2020.

“We can confirm that Suresh Muthuswami has decided to leave TCS after a 26-year career in the company,” said a spokesperson for TCS.

Mint could not ascertain the reason behind Muthuswami’s departure.

Businesses from the US and Canada accounted for 51.1% of the $29.1 billion in revenue at Mumbai-headquartered TCS in the year ended March 2024. This implies that Muthuswami, who was responsible for strategy, human resources, finance and legal functions across the US and Canada, was running a $14.9-billion business, which as an independent company would be bigger than the country’s third-largest IT services firm, HCL Technologies Ltd.

While HCL Technologies ended with $13.3 billion last year, Infosys Ltd closed the previous fiscal with $18.56 billion in business.

Muthuswami’s journey

In April 2022, TCS elevated Muthuswami as chairman of the North American region after Surya Kant, another company veteran of over 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 1 April 2022 and 31 March 2024, TCS’s North America business grew at 14.5%, faster than the company’s overall 13.1% dollar revenue growth. During this period, TCS’s America business also grew faster than Infosys’s 11% growth in the US and Canada region. HCL Technologies and Wipro Ltd do not disclose business from the US.

But Muthuswami’s stint saw the cancellation of a mega contract (the value of the work was more than $1 billion). Last year, Transamerica Life Insurance Co. scrapped a $2 billion, 10-year deal, five-and-a-half years after the American arm of Dutch insurer Aegon NV awarded the contract to TCS in 2018.

In June last year, Krithivasan took over as the TCS CEO after the abrupt departure of Rajesh Gopinathan in March. Until now, Krithivasan has managed to steer the company well: TCS reported a 4.1% revenue growth last year. Save for the 0.7% growth in the pandemic-hit 2021, this was the slowest full-year expansion at TCS since it went public in 2004. Still, TCS’s 4.1% growth was better than the 1.9% growth at Infosys. TCS’s performance also stood out as Cognizant Technology Solutions Corp. and Wipro Ltd saw their revenue shrink. Finally, TCS also ended with an industry-leading operating margin of 24.6% last year.

Under Krithivasan’s watch, shares of TCS are up 35.7%, lagging its rivals Infosys and HCL Technologies. Shares of Infosys, HCL Technologies and Wipro have returned 41.2%, 45% and 27%, respectively, between 1 June 2023 and 23 August this year.

Unlike his predecessor Gopinathan, who was ousted because of his management style—dubbed abrasive by people who worked with him—Krithivasan is a more likeable boss. Save for a few changes, he has avoided making too many changes.

However, TCS has seen some exits, although some of the departing executives retired.

Late last year, Dinanath Kholkar, TCS’s head of partner ecosystems and alliances, resigned. In October, the chief technology officer, Ananth Krishnan, retired. In May, the company’s chief operating officer, Natarajan Ganapathy Subramaniam, retired after he turned 65, the company’s mandatory retirement age.