During the Q1 earnings call, Mike Salvino highlighted that while our transformation journey is creating value for our customers and colleagues, we have had shortfalls in the quarter and did not deliver on our global financial targets.
In Q2, we are laser-focused on accelerating cost-optimisation to support DXC's growth. Our plan comprises multiple levers and though we are making good progress we need to go further.
Therefore, after careful consideration, we need to take the difficult decision to defer our plans for merit increases for colleagues except in the Global Innovation & Delivery Center (GIDC) countries - Poland, Slovakia and Bulgaria. For colleagues in GIDC countries, further details of the next steps of the process will follow in due course.
We will regularly review our progress against the cost optimisation plan. If we are able to exceed those targets, we could revisit plans around merit increases later this fiscal year.
I recognise this news comes at a difficult time for everyone in our region. Our goal for cost optimisation is to improve our margins and position us for growth and to create room for investment. I am confident that the actions we are taking in the short term, however painful, will help make DXC a better business in the long term.
Please remember to join us for the EMEA Town Hall on September 14 to hear more about our transformation journey and cost optimisation plan.