Thread regarding DXC Technology layoffs

Earning Call - Selected quotes

For all of you that continue to be surprised at the WFRs, consider the following from the 3rd Quarter Earnings Call transcript (Feb 8, 2018).

"In this quarter we continue to re-balance our workforce. We reduced our labor base by an additional 3% in the quarter through a combination of automation, best shoring and pyramid correction. We also continue to re-balance our skill mix, including the addition of 5,300 new employees and the ongoing retraining of the existing workforce." (DXC CFO)

Key items to consider

*...rebalance the workforce (if you have the needed skillsets you can stay, if not... )

*reduced out labor force by an ADDITIONAL 3% in this quarter alone (That is quite a few people with more to come this quarter)

*automation (if your job or portion of your job can be done via automation it is not a matter of if but when)

*best shoring (that's code for not the USA. Puerto Rico is a start for contracts requiring US citizens. When you hear that DXC is opening shop in the Virgen islands, Guam or Somoa then run, not walk to the nearest US based exit.)

*pyramid correction (not sure what this means but using the word "pyramid" in the context of business is not good optics in my view)

*addition of 5,300 (good for them and their new job, but if their is a total reduction of an additional 3% and the goal is to reduce total headcount then I am seeing this a number of people let go for the new positions to be filed)

*ongoing training of the exisiting workforce (SABA was a first step to identifying those with the next generation skills they so desire.

More good stuff in the transcript. Read the whole thing to get the full context of Mike and Pauls responses to the analysts.

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| 2634 views | | 8 replies (last February 12, 2018) | Reply
Post ID: @OP+RECFhOF

8 replies (most recent on top)

The Register always seems to provide some good tongue-in-cheek analyst. Here is some for the DXC 3rd quarter...

https://www.theregister.co.uk/2018/02/09/trumps_tax_reforms_lft_dxcs_profit/

Enjoy

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Post ID: @3vod+RECFhOF

Its not so much a skills pyramid as a salary pyramid.

Mikey recognised back in CSC days that people who had been with the company for a long time had accrued pay increases over the years, hence they are more expensive than hiring someone in new with the same skills.

Ideal situation:

1) Don't give pay rises

2) Keep morale at a level whereby you can keep depressing wages by forcing people out the door for "continual improvement" - ie continual wage suppression.

Its a strategy which economically works as long as high unemployment continues. Unfortunately those conditions globally as not heading that way. As employment increases so demand causes competition for skills and you basically won't find people prepared to sign on for chicken feed.

Which is why location is important - be it "offshore" or "sh1tshore", the latter being finding somewhere to open a facility with higher unemployment that anywhere else in the same country. Every country has depressed areas and nationally you will find huge differences in pay rates between say a capital city and somewhere in Crapsville.

Of course its a large strategic gamble - relocating facilities is not cheap and if you follow the sheep to the new cheap location you will actually create a vast IT hot house in its own right - see the Indian offshore experience. The tech hubs in India are not the cheap labour they once were, because of competition.

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Post ID: @3uur+RECFhOF

Define / list low cost country’s ok. I know my position is on the short list and am forgotten when meetings are called.

Being over 60 will make it had to find something else.

But when they need someone that will work till the job gets done ir all hours of the night. I. Get called not these low cost know nothing employees from the low cost countries

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Post ID: @2hkt+RECFhOF

Labor Pyramid is how Meg Whitman tried to justify age discrimination,

https://www.belaborthepoint.com/2016/09/words-matter-preparing-for-a-reduction-in-force/

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Post ID: @1ift+RECFhOF

I swear that’s all the bastard has done since he came to power.

He cut down the layers in CSC, and got the pyramid he wants with 8-9 layers to the CEO. It seems he is basically doing a rinse and repeat all over again with DXC.

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Post ID: @xvx+RECFhOF

I don't know about "not enough entry level employees". Seems like that's all they have been hiring/acquiring in the low-cost countries. Skill maturity is not valued because it is not measured.

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Post ID: @ubi+RECFhOF

DXC currently has a "Diamond" shaped workforce, there are not enough entry level employees and far too many employees in the middle, giving us a diamond shape. The goal is to layoff, or through attrition, slim down the middle, and hire only at the low end to improve our workforce structure. If you are in the middle of the pyramid, DXC wants you out. Ideally through attrition -- which is why we do not give raises.

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Post ID: @zqc+RECFhOF

"pyramid correction" refers to the labour pyramid - few at the top, many at the bottom. "pyramid correction" is just another euphemism for layoffs.

"best shoring" doesn't just mean "not the USA", it means not ANY high cost country. If you're not already in a low-cost country your job is at risk - they are trying to offshore every possible job.

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Post ID: @pse+RECFhOF

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