Thread regarding DXC Technology layoffs

Dxc was designed to be slowly liquidated from the very beginning so that the considerable existing contracts held by csc and hp could be milked for all they could get. Viewed from that perspective. Both Mike’s have been very successful. And the company has probably lasted a lot longer than they originally thought.

Its a bit like the apprentice show from BBC in my area

Yesterday i had a fresher email one of the most senior client partners directly to ask for some information he was actually tasked with producing. These young ones have no idea, no desire to learn, hide behind experienced staff, and when it suits them aim for right at the top so that they are recognised.

Except this backfired spectacularly and he got his a-s handed to him and told never to email anyone on the client side again.

Ross Perot - has a point. Ton of new hires at senior management levels in hr, finance, ops and it and other supporting functions are definitely been paid market plus rates (with a huge belief that they will help turn the company around). Hope that happens, else they will be the first one jumping out (and used this company as a ladder). only time will tell.

@ulk+1kLXL3Gp Evidently the contracts aren't really that profitable in action and DXC managment thinks they can get a margin that's closer to the industry average if they refuse work. Clearly being the cheap low margin shop in infrastructure isnt working the operating leverage is too thin and things do go wrong especially here. The only question I have is if it's customers fleeing the buisness or if it's a deleberate choice to pass on work that doesn't pay well.

To the 11-12% folks, 11-12% of billions is serious money and doesn’t explain the cuts and decline.

Indian pure plays do well, but that’s comparing apples and oranges. 100% of the global roles are near shore only. So it’s irrelevant what India offers. They can’t compete for onshore work and if they pay market rates in their onshore divisions are doing secure work then there is no way they can be cheaper than DXC.

Still waiting for that answer. It simply doesn’t make sense. They slash n burn and still don’t make money??!?

• @cdl+1kLXL3Gp. well said and to add to that..... most of the new yahoos hired at market rates or even above have never worked in an outsourcing business and riding on our ... sses. These guys are always busy on LinkedIn posting and sharing and reposting articles. essentially getting ready for their new jobs. What a place. It was sweat and labor of thousands of hard working people over multiple decades.... and now the Indian pure plays are eating us alive. ... and the newfound hired senior execs are just clueless.

GBS has always done well because it’s primarily the consulting arm of DXC.

It’s basically DXC using its own contractors to do client jobs at contractor rates. Cheap staff doing bang average projects but at avg $900 a day rates. Given that most people are on $200-300 a day max it’s a sizeable profit.

Profit margins for DXC for the last 12 years:
https://www.macrotrends.net/stocks/charts/DXC/dxc-technology/profit-margins

Latest about 2.4% … not sure cutting executive bonuses will do the trick alone but maybe a start although the next person replacing Salvino probably will demand similar …

DXC is passing up on alot of deals because the margins are low. Thats just stupid, a profit is a profit as long as we dont lose money then take it and then build on that with the customer to add more profit.

@qbz+1kLXL3Gp Please note I'm an outsider looking in. Question, is this contributing to the lower amount of IT outsourcing contact wins? I ask because Ken Sharp (who actually seems like a decent CFO) said that DXC is passing up on alot of deals because the margins are low. So are they actually adressing the problem? Presumably there's work out there at the 10% margin level, right? Why have new awards dropped In the GIS side of things while GBS seems unchanged. I get that cloud contributes to this but there seems to be more to the story.

When I worked at DXC the cost to win business was high. This was because the product offerings were poor. There were WAAAYYY too many pitches and proposals that were rejected.

You always get some rejections. That's business. But it was sad to see. We'd get in the door with a good pitch. When we'd get into the details and the prospect would ask tougher questions it was apparent our offering was incomplete. Ultimately, we'd lose the bid after doing lots of work, but you can't make up for bad products.

That money has to be recouped. That 11% margin someone mentioned - that is on the bid that one. There was a lot of investment into all the lost projects too and that margin on the one win needs to cover it.

@aho+1kLXL3Gpn Its the job of the PM, I do wonder if you're one on these new get PMs that think their only task is to book resources.

We are losing money becaise we have 10+ people in meetings and there is no agenda, no deliverables with due dates.

We are losing money because of contractors

We are losing money because we don't have priorities, everyone is trying to get resources for their projects.

We are losing money because most don't take ownership and always goes thouh PM's and meetings, instead of technical people talking to Technical people and reporting back

DXC has been gone already. All reasons are due to mafias of former CSC.

A couple of companies I've worked for:

Capgemini target margin: 33%
Atos target margin: 31%

DXC margin on bids I worked on: 11 - 12%

There's your answer. The company pitches at too low a margin to actually be profitable after overheads are considered. Then it annoys its customers by taking staff out to try to make profit, and loses customers. That causes it to lose (loss-making) billable work, and drives more cuts.

DXC needs to fix its target margin on deals if it wants to generate profits. Instead, it removes experienced staff and lets them go straight to its competitors.

Secure European accounts. Can’t offshore for security reasons. The Virtual first policy is quite attractive. Now being told to drag back into the office is starting again.

IBM have just revamped their London office and forced staff to come in, its a state of the art office. So they are definitely not cutting back on location, and its London too so more costly. My friend works there and she said its packed out all days. So they are not operating on Skeleton staff there either.

Well said.

The only place I see DXC spending money is on executive rewards and share buybacks (which is also only benefit the executives), that's it. It's certainly not on staff, it's definitely not on offices, training or equipment so ...

Also people ba----g on about us expensive old timers, you're mistaken we're the cheap ones, as we've had to put up with no raises for whole existence of DXC, it's the new joiners at market rates often 1.5 - 2 x more than existing staff who are costly. That and all the contractors, that DXC is forced to us as no one sane will join DXC.