$27bn DXC becomes $20bn DXC in two years. That's just over a 25% reduction. Even by Mike's usual 10% per annum revenue loss rate, that's even worse.
Hey but I'm sure we're just about to pivot to growth. I'm sure having no sales people, cheap kids and a fleeing customer base are all indicators that it's all about to pick up...
Perhaps this is a question for the analysts call?
Given that the board voted to remove strategic goals from their incentive plan in favour of more financial goals (whilst also voting for bigger stock options on their bonus), then I doubt there is ANY focus on the actual engine. There's no incentive for strategic planning when you can just burn shed loads of staff.
The $21,733 billion they made in 2018 fell to $20, 753 this year. Aww (╯︵╰,) That's a 4.5% drop despite all the 'investment' DXC had injected into 'leveraging partners, acquisitions, skills expansion and new talent'. DXC describes 'Talent' as having 'deep industry experience'. OK, so not the same deep industry experience that the 20,000 people you fired, already had?
The only revenue contributors likely to gain a mention will be Bluescope steel, DB cargo, Gaurdian life insurance, SAS airlines, and West of England Health Science Network. Who? Exactly. But I am sure they all have nice logos.
DXC still have Luxsoft up its sleeve that they could use. They are still there. A bit like fruition. Not dead, just... pining. But DXC don't seem to know how to plug them in early enough on engagements and invest in them. If only the integration of sales and delivery was as seemless as the powerpoint slides that fly about. DXC would be soaring by now.
DXC Mainstream IT modernisation is slow as a dead duck and continued lack of investment in new tech means lack of agility in being ready to roll up the sleeves, get the hands dirty and simplify that client legacy stuff. But how can you simply the clients' IT when DXC can't optimise its own?
So what's the forward plan? Are we done with all the endless culling? There must be an actual plan by now? There has to be. Is there any chance at all that the chair of the board wil consider retirement next year so that the planning for a replacement can start and breath new life into this mess before the share price falls through the floor? No? I guess the same old culling and trajectory then. More f—ging of dynamics, service now and SAP in a one-size-fits-all model until the clients agree to play ball and change their round pegs to suit DXC's square shaped holes (which will never happen).
$20 billion isn't bad, though. It's still above water even if its below DXC's own goals. But the market has moved faster than this lumbering oil tanker and depsite increasing the workforce reduction program to warp factor 9, the impact upon the client business has been counter-productive. What Mikey would call "Headwinds" and what the rest of us would call the results of a 'stupid mindless —wit'.
So who is making this $20 billion?
US 36% ($7.6B)
Other Europe 25% ($5.2B)
UK 15% ($3.1B)
Other International 14% ($3.0B)
Australia 7% ($1.5B)
Good luck to you all and don't forget to bring you favourite alcohol to join in tomorrows BS Bingo. You'll need it!
I just saw the lastest job advert for a digital sales lead in DXC on linked-in. 37 bullets to describe a job!? No wonder they're struggling. Such old ITIL-esque language and repeating cost optimisation, expense management to the point where you think - have DXC got a cost problem here?
By contrast, the same role in Accenture intelligence operations was far more appealing, engaging in clear, concise language and a salary range. Refreshing after reading the dour, stuffy, black and white scripture from the old testament.
Would have to agree with NOT giving any pay raises.
Here in the America's they can bill easily 85 per hour so 85*2000 hrs = 170,000 yearly.
Lets go with 20,000 billable folks.
170,000 * 20,000 = 3,400,000,000 yearly.
Lets go with with average contract has 2% yearly increase to customer.
3,400,000,000 * .02 = 68,000,000 yearly.
Lets go with no raises.
68,000,000 - 0 = 68,000,000 yearly.
Easy money.
by reducing costs and hiring cheap workers for a minimum salary.
who cares about clients.
The reason why automation doesn't work at DXC is because they refuse to invest.
I mean properly invest.
Creating a robotised car factory isn't done by 2 guys using c-ap they found in the dumpster.
It isn't done inside of one quarter either.
It's the refusal of long term planning that Mikey is shortsighted with more than anything else. His pockets are filled by quarterly results and as such anything that is not deliverable in the next quarter never gets a chance of happening.
You need go BIG in order to see results.
The irony is that the other thing needed is a cast iron will to tell people that they need to cooperate with automation - he has that in spades. His despotic ire is used all of the time, just not in the right direction.
He simply doesn't understand how to make this business work and additionally, refuses to let anyone beneath him have an opinion and help him make the right choices.
This is why he needs to go. In fact, it was obvious very earlier on in FY13 that he was the wrong guy IMHO.
The Zachs estimate is for this quarter indicates a 7.88% decline from the year-ago reported figure with the consensus mark for at $1.71, suggesting an 11.4% decline.
Obviously Mikey will have to return to his 'headwinds' again. They are those in-your-face strong gusts of 'traditional application services' winds that blow against your digital trajectory and slow progress of selling leading-edge, low-cost country digital offerings that follow the sun, but seldom the client.
Challenges such as Inept sales teams, lack of a coordinated strategic road-map; inconsistent integration of sales and delivery and end-to-end, repeatable-delivery by suitably resourced, skilled and experienced workforce isn't important and only serves to hamper important financial discussions.
On the positive side, due to all the staff cuts, earning is 5.1%. Of course, some clients have been lost but that doesn't hit the books for a while and is just legacy run-off and background noise.
The non-GAAP earnings of $2.19 per share is down on the $2.28 per share this time last year. The current drop in stock value shows lack of investor confidence that will require smiley business type clip-art and plenty of digital buzzwords, that will be welcomed by all those hoping to play in tomorrow's BS Bingo.
#iseedxc
Born yesterday; dead tomorrow.
@KFA – you have correctly identified the problem. Wipro cleared $325M on a revenue total 40% that of DXC over the same period.
This is what burns at the soul of ML “I keep cutting costs, why is not working?” he is a salesman, he understands the stock market and plays to the crowd - but he does not understand the business. ML needs to go fast.
To continue with the Wipro comparison (you could take other MSSP) they invested in automation heavily *after the slideware was done, engaging engineers to build and document a ‘real’ platform.
Give somebody else a go, it is apparent that this guy does not have the ability or the team to even execute on the current ‘carve up and sell’ plan!
By not giving any of us pay rises or bonuses
Dunno but Mikey sure makes a bucket load.
By selling products and services for more than they cost the company.
DXC is actually fairly profitable - it made $271m net profit in the last reported quarter.