DXC has recently decided to stop paying its suppliers the money it owes them, in what it is calling internally a "payments furlough"! The company is simply witholding payment without justification. Not sure how legal this is, but it must go against the terms of many of the contracts DXC has signed!
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The longer they keep money in the bank the better it is for them. Interest is less for starters.
can dxc run without all of the utilities? they should try by not paying all of them altogether. That'll be interesting to see the biggest IT vendor running without any utilities.
Here's the deal: suppliers that don't receive payment on time merely place the particular DXC Account on credit hold which impacts BAU and any project work. The usual suspects bang their chests and create a lot of hot air.
In Australia the various suppliers are on 105 day terms from the 15th of the next month following successful receipting (asset management and matching CIs) for hardware and software procurements. Can you blame suppliers being so angry?
OTOH DXC pockets cash for delaying payments.
To be fair, any company tries to collect money owed faster than it pays monies owing...
That's just the best way of financial control...
Big companies ALWAYS screw over suppliers. I'd imagine some of our bigger clients do it to DXC too...
Meanwhile we on the contracts are nagged and badgered incessantly to try to get the clients to pay DXC BEFORE the invoice is due. Which is normally 30 days. Yet we "pay" vendors on 65 day terms which we all know turns in to much longer terms every single time due to our "best" shore resources not being capable of paying invoices timely or being told not to as exampled here. What a cluster F*ck
This has been going on for a long time ago. A year ago under CSC bills were not being paid for as much as a year. Utilities were frequently being cut. Staff were standing in front of power boxes to prevent disconnections at data centers. The new offshore team responsible for paying suppliers said “they were deciding who to pay each month.” The crazy thing was between diversion of leadership time, late fees, overnighted checks and penalties the process was costing CSC a lot of money every month. It is all part of Mike’s plan to lose money on every transaction but to make it up on volume.
If DXC is doing this then why don't all it's remaining customers start to do the same? Especially in the face of broken promises and missed SLAs!
Depends on the individual supplier contract. They will have provisions dealing with that scenario. A requirement to pay will usually be drafted into a separate heading or otherwise form part of a list of contractual obligations on their customer DXC and will refer to a section dealing with the consequences of a breach of those obligations.
The clause will say wither there is an express right to suspend work until sums are paid, but suspending services in the absence of an express right may amount to a breach of contract on the part of the supplier. So they have to tread carefully. DXC is using its muscle and lucrative purchasing power to bully its supply chain - not uncommon today, unfortunately.
Such bully-boy behaviour often leads to bad client-supplier relationships and bad publicity for the bullying corporate firm. Instead of investing in its suppliers and building trust, DXC serves only to operate an adversarial relationship.
But then given the ethics of this firm, are we really surprised?
i wonder how long the stocks will come tumbling down.
I told you so. I'm right. I saw this coming and warned you all!
Is this backed up by accounts payable data on the 10Q’s ?
Not surprised they are going to s--- it dry and then sell those that are left for more bonus and profit in their pockets
But those making those decisions are getting their bonuses