It's a pretty bleak outlook.
The company's in a very severe financial crunch, with no new revenue streaming in for months on end. This is the most challenging fiscal year yet. The offering-led organization is a mess. Each group operates independently. The performance is dismal across the board.
Management again hit the brakes on all hiring and travel. More layoffs are on the horizon. They're gonna burn through a ton of cash and rack up a lot of new debt to swing those.
The offering-led model was yet another poorly planned and executed move. They are now bogged down in administrative minutia instead of selling.
Management consistently makes major changes without due consideration, then wastes a ton of cash and resources on addressing the resulting symptoms, only to find themselves back in the same predicament time and time again. This is what happens when you are managed by the likes of Mike or his minions.
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Actually it was M1 who pivoted very strongly to an offering led model when DXC was formed. It was very heavily focused on product management and the offerings were responsible for the P&L. However the company was very regional and M1 expected the offering leads to push into the regions instead of the regions pulling through the offerings. It was not led from the top and therefore it struggled. Also top line leaders under M1 cannibalized each other's business (taking financial credit for other's sales).
M2 pretty much ki-led the offerings and pushed hard on regional control which really fragmented the company. The regions just sell what they want and also built their own regional offerings (wasteful and inefficient). I think once M2 saw how this was not contributing to a positive company culture, not leading to sales, and in the end wasting money, he tried to pivot back to offerings, its way to late and DXC has lost too much talent. Failure to lead from the top, consistently, has been a problem for a long time.
Question from an outsider. Didn't CSC originally do an offering lead model? It was M1 who switched the organization to a regional sales model. I'm assuming that was to coincidence with HPES way of doing buisness. If so why has switching back caused so many issues. It seems to me that there's some truth in what the other posters here have said about DXC situation being poor before the offering lead model.
M1 golden?
Only if you looked inside his bank vault.
Wasn't golden for dxc business or the staff. It was only 90 a share because he lied
@2kqi+1qF7sjzZ - Golden age was when Mike 1 was driving the bus and the stocks were 90ish a pop.
How did it work before then Mouse?
My impression was that previously each AE had zero visibility or care to look at what DXC was capable of outside of whatever their customer was doing already?
I've certainly seen a lot of cases where we could have presented options for increased capability to customers but the account were stuck in the stone age and didn't want to rock the boat. They just waited for the customer to come along and say "can you do this?"
I'm not saying its not terrible at the moment, I'm just saying that there wasn't a golden age prior either.
The offering model is a dogs breakfast. They have allocated each customer to an offering based on which offering the customer does the most business with. It’s then down to the offering with the AE to open up ops for the other offering. Each offering wants control and an understanding of their prospects so will go to the AE for info. The sooner this model is flushed down the toilet the better.
So it's almost like the $1bn a year should be better spent on investment... Fixing problems or making acquisitions of companies who operate in future technologies...
Salvino made no acquisitions...
The trouble with dxc is that depending on who it's talking to it's either doing really well... Or really badly.
To be clear, DXC is not going out of business and is still largely operating with a positive cash flow. But its fading away to insignificance, every quarter getting smaller and smaller and less relevant to the industry. It won't fade away to nothing but it could well operate for another decade or more as a < $5B company, propping up its share price by spending most of the cash on share buybacks (which is what its been doing for the past 4-5 years).
DXC is helped by the fact the client base are finding it more difficult than thought to execute "digital transformations" and totally migrate to cloud and off legacy and so DXC keeps plodding along - going nowhere - as clients retain DXC to keep the legacy systems/data centres running until they are finally ready to decommission them completely.
Remember - DXC is the IT services equivalent to what MicroFocus used to be for software products. The place where they go to "die" or more accurately continue a zombie like existence for years and years, with small profits eked out maintaining them with managed decline.
I keep hearing that the company is in a bad shape (financially that is... Obviously it's got loads of other problems!)
However if it can find all those millions for exec pay and an annual $1bn in cash to buy its own shares... It can't actually be doing that bad can it?
The trouble with dxc is that depending on who it's talking to it's either doing really well... Or really badly.
Maybe the biggest fix it needs is a commitment to honesty and transparency...
Mary and Mike used to go to Davos every year. They found it hot.
Was just another notch on thier list of free DXC global holiday funds. Strictly business of course 😆.
There is no travel freeze. Dxc is in Davos.
What I don't understand is how the same behaviour can be repeated so often without any of the so called leaders thinking "Hmm maybe we're doing something wrong"
Panic cost cutting, in pointless exercise to put lipstick on a pig, has real impact in the following quarters, so then there will be a contrite confession they cut too far but now they've changed. Repeat.
Offering led p&l is going in full swing Atleast that is what the accounts have been told. Q3 and q4 will be a writeoff and blame saliva no.
with Mikey2 gone and a lame duck leader/caretaker for the rest of the fiscal year, it will be used to front load all the bad financials so look out for large scale WFR announcements and even worse than expected Q3 and Q4 numbers, to try and clear the decks for a better (or more realistically less worse) Q1. Ideally the new candidate is already selected and is working on ditching the offering chaos and working out which parts of the company need jettisoning quickly (am looking at you GIS here) so they can come in with all the bad news out there, and a fractionally more constructive this-is-what-is-left-and-how-we'll-survive message