The sharks of wall street are getting in early to get a chunk of the remaining DXC carcass before the last recognisable HPE / EDS / CSC elements are cut adrift ..
A nice earner for those at the top of the tree..
What now for the real people ... keep an eye on the package they offer - they will work out a way to move away from the legacy terms....
Wall Street are happy because they promised to buy back 50% of the stock in three years. That is a lot. Plus they have said they will sell 5bn of assets. That too is a lot.
This is big stuff, but none of it to do with the functioning of DXC as an IT company. This is just wall street gymnastics... Again
but the problem appears that while a quarter of the company (by revenue) is being hived off, its not being re-invested in any meaningful way, its being channeled into retiring debt, share re-purchasing and dividends - popular with short term investors of course, but not a way to grow or even stabilise the residual business. Also, with record low interest rates, does debt really need retiring at the moment? Can't think of anything more constructive to do with the money?
No wonder the analyst call was abruptly ended (where was the "one or two more questions" comment before it ended?) as they started to dig into exactly why Q2 was so bad and Q3 and Q4 were expected to be no better.
Probably good time to demerge and sell off bits to generate cash and reinvest in their core businesses.
Still no news to me on how Sal Vr 1.0 going to reorganize the company and what this means to the grunts on the ground and various levels of duplicate and ineffectual management and processes
A Lot of Sal Vr 1.0 to do - will he trim the DXC carcass down before a final sale to a competitor ?
Its going to be chaos... the staff are struggling to deliver projects now ... the UK weekly project RAG status isn't a green and pleasant land.. think red.... a lot of red.
I imagine in flight customers are going to be looking very carefully at commercials.. at least UK gov insisted on very strong commercial protection... so when DXC cast off the contracts the new supplier may be in for a shock if they don't do their DD
I wouldn't want to be in any of the elements that are set adrift. Mass redundancies and cost cutting everywhere and new management which means the managers both junior and senior are now on borrowed time. No redundancy packages because the cupboard will be bare. Let the games begin.