Why???
6 replies (most recent on top)
Bad management. They ignored the signs of the shrinking market and reacted too slowly. Yet they are not the ones getting laid off. Perhaps they should be.
Who was the DST exec that gave away the bonus income from clients for 99.9% computer up time? He should be fired!!!
Sold the Output division today so they can buy back more stock and inflate the EPS ratio just like they have been for the past 5 years. Investors are dumb if they continue to invest in a company with 4% growth and a inflated stock price. The Brokerage Solutions business will be the next thing to go.
DST ignored the sub-acct market, and had to play catch-up once their good old boy mgmt realized that it was a mistake. That started way before this layoff.
Mutual Funds are just as popular as ever. However, some genius negotiated DST out of a bonus system for 99.9 percent up time, but left the financial penalties for down time. That cost quite a bit.
DST has been quietly riffing long term staff for about 8 years. Then hiring cheap replacements. Some of the people riffed in this one had 20-30 years with the company. Hard working people, too. If the SEC ever approves off-shore staff for security sensitive positions - look out. The data center will be at DST-Bangcock before you can say lay-off.
The biggest reason is that Steve Hooley is now in charge. DST was doing fine despite the shift to sub-accounting, but then the TOMs retired and now Hatchetman Hooley is in charge. Rather than customer service and a good product for long term growth, the company is now focused on quick profits and inflating the stock price so upper management and the board can cash-out soon.
Two main reasons
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There's been a shift to subaccounting for the past decade which DST makes far less profit on than standard TA accounts.
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Mutual Funds are not as popular as they once were.
Consider the mutual fund record keeping is DST's highest revenue source these two factors have contributed to declining profits over the years.