ServiceNow parts with president and public sector head after internal probe
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The software vendor indicated it violated company policy in the hiring of former Army CIO Raj Iyer on the heels of a large contract award.
ServiceNow, a supplier of cloud-based enterprise software tools, parted with its president and chief operating officer, CJ Desai, and its head of public sector, Raj Iyer, after an internal investigation found violations of company policy, the firm said in an earnings report released on Wednesday. The report stated that Desai's departure was the result of a mutual agreement.
Longtime ServiceNow executive Chris Bedi was named interim chief product officer, the company said in a statement.
The company said that the hiring of Iyer to lead public sector business development was at issue.
In a May 2024 filing with the Securities and Exchange Commission, ServiceNow said it had "received a complaint that raised potential compliance issues during the procurement process related to one of its government contracts."
Iyer announced plans to step down as Army CIO in January 2023, and joined ServiceNow in March 2023. Iyer's government departure took place on the heels of the Army's $432 million deal to consolidate ServiceNow licenses via reseller Carahsoft.
According to a report in Bloomberg, the company informed the Department of Justice, the Office of Inspector General at the Department of Defense and Army procurement officials of their internal probe.
"ServiceNow is in the process of completing its investigation and will continue to cooperate with all government entities including the Department of Justice. They are reviewing this matter and we are cooperating closely with them as it moves towards resolution," a company spokesperson said in an emailed statement.
"There's no federal business that we foresee we will need to unwind. Full stop," ServiceNow's Chief Financial Officer Gina Mastantuono said on a July 24 earnings call in response to a question from an analyst.
"While we believe this was an isolated incident, we are further sharpening our hiring policies and procedures as a result of the situation,” said Bill McDermott, the company's chief executive.