Wednesday, 16 December 2015

CSC's New Chairman.....No!!


CSC has announced the retirements of Rodney Chase and Erik Brynjolfsson from its Board of Directors. It all seems to be very sudden. The announcement was made yesterday and already today their names have disappeared from the CSC website. It's like the fate of those who became "non-persons" in George Orwell's "1984", it is as if they never existed.

We wonder why Mr Brynjolfsson retired. He is relatively young, he only joined CSC's Board in 2010 and he is an acknowledged international expert in his field.
However, we shed no tears over the departure of Chairman Rodney Chase. As a non-exec he would have been directly involved in the ill advised nomination of Michael W Laphen to the posts of President and Chairman. He also failed to act when it was clear that Michael Laphen was in denial about CSC's real situation when the company was being driven to the edge of the cliff. He seems to have been too "Laphen compatible" and we think applied the same approach to his responsibility to oversee Michael Lawrie.

So we welcome a change of Chairman, but are astounded that CSC has named Michael Lawrie to this role. We have seen nothing to suggest he is stepping down from his executive positions as President and CEO. So CSC goes back to concentrating power and authority in the hands of one person, as it did previously. This is poor Corporate governance, and takes CSC back to the construct that allowed Michael Laphen to bring the company to its knees. Our response to this is a clear NO! Has CSC learned nothing from the Laphen era??

The CSC announcement talks about the nomination of Bruce Churchill as Lead Independent Director being a demonstration of the company's commitment to Corporate governance. The nomination of an outside director as Chairman would have been a much greater show of commitment than increasing Mike Lawrie's omnipotence

69 comments:

Anonymous said...

So, Mr Lawrie now serves as Chairman of the Board of Directors for BOTH CSRA and CSC. That's funny because in the Information letter that was sent to all Shareholders of CSC, it stated the following:

Because of their current or former positions with CSC, certain of our expected directors and officers own CSC common stock and equity awards. Following the Spin-Off, even though our board of directors will consist of a majority of directors who are independent, some of our directors will continue to have a financial interest in CSC common stock and equity awards. In addition, it is expected that Mr. Lawrie, who will be Chairman of our board of directors, will continue serving on the board of directors of CSC and as its Chief Executive Officer. Continuing
ownership of CSC common stock and equity awards, or service as a director at both companies could create, or appear to create, potential conflicts of interest if we have disagreements with CSC about the contracts between us that continue or face decisions that could have different implications for us and CSC".

So, they even stated that being directors in both companies COULD create or appear to create potential conflicts of interest that could have implications to BOTH companies. Yet, even with that potential for problems, it wasn't enough to stop the appointment.

To me - that says "we know it's a bad idea", but we don't give a (#)(#*)@. Speaks volumes of our leadership.

Anonymous said...

Rodney Chase was more than just "involved" in the replacement of Van Honeycutt by Mike Laphen. He was on the Board's Nominating and Corporate Governance Committees. Thus he must have one of, if not "the" key decision maker in the departure of Honeycutt, in appointing Laphen as CEO and Président, then in naming him as Chairman too. What a track record!

Anonymous said...

Its like a Jackie Collins novel this!

Anonymous said...

Someone ought to mention about the EBG reorganisation. EBG got broken up a few weeks ago, with Big Data and Cloud becoming part of GIS.

Cyber was left on its own, with Patrick Reidy (director of Cyber Security) reporting directly to Mikey. No sooner had Reidy announced this to an all hands cyber call and he was toast. I guess that first meeting was a rather bloody affair.

This leaves cyber with no director, nor operational leader (also TBA) and now Dan Hushton (CTO) double hatting as Cyber Director.

You have to wonder where its heading...

Anonymous said...

Mikey with all his millions in $0 stock options, and special dividends, and multiple jobs, and he still cant afford a tie. Shall we have a collection and buy him one for xmas?

Anonymous said...

It would be too tempting to tie it too tightly.

Anonymous said...

Patrick was Global VP for Cyber. Word is he left because he found a new job outside of CSC. CSC went from a global operating model back to regional in 2015, so the regional leadership remains in place. Unfortunately, the structure means CSC its is worst enemy when it comes to bringing its global reach into play. At least the grass is not greener elsewhere. From GE, Capgemini to McKinsey--all lack to manage and act globally once questions such as revenue, OI and cost allocations come into play. Leaving Cyber outside of GIS and GBS makes sense as its really an issue for all industries and clients. On the other hand it means continued friction with revenue / OI sharing with GIS/GBS leads. Then again a good business unit to carve out and sell to someone. Question if it could be sold to any non-US buyer. More questions. What happens or happened to former EBG leaders? And why give the role to a CTO who has enough on his plate and spent most of his time at EMC/in the cloud world. Very likely an interim solution and an outsiders view is not a bad thing to see things in perspective.

Anonymous said...

Come on, Zuckerberg had a hoody and shower shoes for years...

Anonymous said...

The AT&T/CSC relationship didn't last long. I for one are quite frankly not surprised one jot.

AT&T got all of CSC's networking business and CSC got, well, nothing now AT&T have sold their cloud efforts to IBM:

http://seekingalpha.com/pr/15691296-at-and-t-and-ibm-expand-their-strategic-relationship-in-managed-application-and-managed-hosting-services

It was always going to be like that and it was fairly obvious as time went on that the much mooted "alliance" wasn't a two way street.

Anonymous said...

No raises last year for US employees (at least in my group) and limited (15% of the employees) the year before because the numbers didn't support it. However... filed with the SEC today...

On December 15, 2015, Computer Sciences Corporation (the "Corporation") granted a performance-based retention award (the "Performance Award") to J. Michael Lawrie, the Corporation's Chief Executive Officer, with a total grant-date value of $10,000,000. The Performance Award is in the form of 338,869 performance-vested restricted stock units ("PSUs").


On December 15, 2015, the Corporation also granted performance-based retention awards to Paul N. Saleh, the Corporation's Executive Vice President and Chief Financial Officer, and James R. Smith, the Corporation's Executive Vice President and General Manager, with a total grant date value of $3,500,000 and $2,600,000, respectively. The awards were in the form of 118,604 PSUs for Mr. Saleh and 88,106 PSUs for Mr. Smith.

Anonymous said...

Nothing new there, usual pigs snouts in the trough. Screw the company but screw the employees even harder!

Anonymous said...

I still don't understand their logic though. What single piece of work for clients have these people done? Absolutely nothing. What money have they actually made for shareholders? Absolutely none.

When we are told that GIS, GBS or a particular region or country hasn't made enough money, we don't get anything.

Someone should be applying the same rules to the top.

Sadly that won't happen though, although I'd hope shareholders would eventually complain about executive pay levels, then again, I'm sure that they are all members of the same golf/country club and best buddies anyway.

Anonymous said...

The timing is interesting, after the CSRA split and before the first quarterly filing for the Commercial business. It probably tells you they're expecting a bumpy ride and so will have already laid plans for more indescriminate cost take-outs to pay for these awards. I think its safe to say the manager has 'lost the dressing room'.

Anonymous said...

I'm pleased to hear Patrick jumped and wasn't pushed. He was a good guy who actually knew what he was talking about - unlike many before him.

When did global leadership get canned? I must have missed that memo.

That's not good news at all. Back to the tin pot dictators, even worse now that the current crop are all relatively new and are now let off of the leash.

A cyber sell off? Maybe, but what realistically would someone be buying? CSC Cyber only has customers that are existing CSC customers. You'd be insane to imagine that you could hang onto those if you bought it.

Anonymous said...

http://biz.yahoo.com/e/151221/csc8-k.html

Anonymous said...

If you still work for CSC I suggest you get out as soon as you can - life is a lot better away from a company that does not care in any way about you or your family. I cannot see Mikey being visited by any ghosts of Christmas to improve his morals - can you?

Anonymous said...

Oh look, theres a surprise, Mikey is on the compensation committee awarding himself $10m in options. Revenues have declined since his arrival. Employees are told by Lesch (HR) that "in a year where CSC failed to achieve our targets its unreasonable to expect a reward". Double standards eh? Does the man have no shame. All hail the (naked) Emporer ...

Anonymous said...

By becoming Chairman, Lawrie is now on the Compensation Committee, the Audit Committee and the Nominating & Corporate Governance Committee as well as being CEO and Chairman. Incredible!

We can see that he has already started work on the opportunities offered by the Compensation Committee by arranging his latest Stock Option awards. Has he never heard of "conflict of interest"?

Even worse is his nomination to the Audit Committee, ensuring there is no more independence of the Audit function. This is amazing, coming just a few years after the integrity of CSC's financial statements and its control systems were, by CSC's own admission, compromised.... a euphemism for "having failed, and not fit for purpose."

CSC has just settled with the SEC for its accounting irregularities, but already the lessons are forgotten.

Time for Mr Bruce Churchill as "Lead Independent Director" to show us if he has any balls, or if he is just another Lawrie "Yes man".

Time for the leading institutional investors to start worrying, and maybe even doing something about it.

Anonymous said...

Maybe I'm a cynic - it struck me at the time that it was all just a ruse to dump CSC's low margin, increasingly commoditised Network business (and people ... and severance liability) onto AT&T. What I couldnt figure out was what was in it for AT&T. But like I say, I'm just deeply cynical.

Anonymous said...

Yes, I had the same idea at the time.

But what perplexed me was how this approach would impact CSC's overall portfolio. I now understand. As CSC will be sold off, in whole or in pieces, it just doesn't matter.

Anonymous said...

It strikes me that the top half dozen or so are valued by the shareholders while the 70,000 others are a waste of space and need to be removed from the payroll since only the top six 'achieve results' - joke.
Only when CSC or whatever it is called is down to these six will the shareholders goals be achieved. Mind you CSC won't be able to do much, apart from move financial information around.
That being the case if I were a CSC employee or customer I would get out fast.

Anonymous said...

Yes, but Zuckerberg built a multi-billion company from nothing, whereas mikey started with a multi-billion dollar company and is reducing it to nothing.

Anonymous said...

Any donations from CSC corporate for people affected by floods.. No.. thought that would be the case....

Anonymous said...

Which floods? India? UK? France? Africa? Thailand? Chile? Myanmar? Mississippi?
If you're talking about Chennai/Tamil Nadu - the CSC Charitable Foundation will give up to $150K to the indian red cross (donation matching runs til the middle of Jan).

I suspect we can skip the tangent about why corporates should feel any responsibility to subsidise governmental stupidity of building settlements on flood plains.

Anonymous said...
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Anonymous said...

So anymore layoff's rumors for the 1'st quarter of 2016? - Looking for a new job outside CSC... But I would hate myself for finding a new job, and missing out on a nice severance a few weeks later. - But then again I don't want to wait forever.

Anonymous said...

12:43, which geographic area?

Anonymous said...

17:42: Nordic region. We' have been cut down pretty bad. - And still not winning bids. - Most of my customers are leaving this summer.

Anonymous said...

I suspect the floods referred to the UK where floods affected areas of England where CSC has a number of operations and employees. There has always been a certain amount of bias where CSC has encouraged donations. Whether that's due to favouritism on the part of the US or utter disinterest from UK management is a moot point.

Anonymous said...

People being put on 30 day notice in the UK again!

Anonymous said...

Well it was about due - after all CSC do invest in their staff, and by that they mean the redundancy payment. Are there any ideas of numbers?

Anonymous said...

No, hidden pockets of people as usual.

Anonymous said...

Another day.. another redundancy program at CSC.

I bet xchanging staff cannot wait to join CSC UK :-)

Anonymous said...

and if you dont get the redundancy payment?

Anonymous said...

Every time I look at this it seems to get worse at CSC, so glad I left

Kathy Mecum said...
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Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

Still haven't fixed things in Workplace tool yet so that happens alot.

Anonymous said...

Several good people announced they quit CSC these days in several regions...Mostly the good ones that are very frustrated with internal processes and lost their faith in the transition.

Anonymous said...

Overhead staff in the UK are being culled, makes you wonder if CSC will be able to fulfill its contractual obligations given the know staff shortages it already has! Will be far worse once the remaining identified staff are gone by 31.3.16.

Anonymous said...

Nothing new i Nordic. - sofar no layoffs. - But some people are leaving on their own. Is it only in UK and US that staff are being culled?

Anonymous said...
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Anonymous said...

Dr Gossain has quit his post too as UKI&NL GM. Generally they change these posts every time they want to restart the 'get fit'. There is only so much cutting one can do without discrediting everything they have said since their appointment. So to continue the cuts its better for Lawrie to bring a new guy in who will restart the whole process AGAIN!!

Anonymous said...

http://www.techmarketview.com/ukhotviews/archive/2016/01/26/sanjiv-gossain-leaves-csc

Seems he left at the start of the week, employees always know last.

Anonymous said...

No surprise that Sanjiv Gossain has left CSC after a relatively short tenure, as did the last 3 Heads of UK. Rumour was that he had a fixed term renewable contract.

One can speculate that the timing of his sudden departure means the CSC UK results for the quarter to December 2015 may be well below Mike Lawrie's unrealistic expectations.

Anonymous said...

Sanjiv is a decent bloke but wasn't prepared to dance to the puppet master's tune . . . . the only winner in all of this is Lawrie's accountant who must be a very busy man

Anonymous said...

i doubt that, the official mail from lawrie states he resigned.

Anonymous said...

I heard it was to do with business direction, Lawrie is still pressing on with more cuts next year (this was officially confirmed on the UKI all hands by Samir Annand) and Gossain knew that we are at amputation stage. The new guy who comes in will know little about the company and will restart the cycle of cuts. That what Benison did, announced in her last year that perhaps we wont need to cut next year, and look what happened, we have been cutting since then to date.

Anonymous said...

First they trimmed the fat, then they cut into the flesh & muscle and now it looks like they're going to pick at the bones !
Morale amongst CSC employees must be at an all time low.....

Anonymous said...

I would think he realised there is another year of cost saving/culling ahead and left to avoid it as its never going to end well. At that level how can "cost-takeout" be rewarding on any level. If you are just going to sack people you might as well just have a lottery type machine that just selects names at random sitting in the office. As has been said, seemed like a decent bloke - probably already looking at CSC as a "learning experience"!

Anonymous said...

When Sanjiv signed up I bet he had no idea he would be spending nearly all his time fighting unions, UKEF, not being able to look staff in the eye knowing what your telling them it utter BS, cost cutting, reorganising, and then some more...

Every moral person gets to a point where all the deceit takes its toll and it has an impact on your personal life.

On todays All Hands, Samir Anand told staff about a lady in Chesterfield who sadly passed away recently, it was shameful on his part that he mentioned that during her illness she used to turn up to work. This is what the company has come to, people are getting ill, divorced, separated from partners, stressed to the eyeballs, and he thinks its OK to turn up to work during all these issues which frankly he is inflicting on people. This poor lady instead should have been forced to stop all work and stay at home with her family. And to top it off when he was asked about more cuts, he replied 'Yes, we are in a transformation'. No shame, no fear... who cares right, as long as i get my huge pay packet. I know i wont be loosing my job.

Anonymous said...

Totally agree the answer to the question on if there would be any further cuts was shocking but typical of management today, absolutely no concern or regard to the impact on individuals and their families.

Anonymous said...

GM Cyber UK/I left as well to join Capgemini. Jim Kaskade ex VP Big Data and lately Digital Applications left as well. Word is they approach people throughout the company by offering packages where they need to or just frustrate them just enough so they leave by themselves. Some great projects going on but the loss of good people spread. The sad part is there are no communications whatsoever from the top...just word of mouth.

Anonymous said...

Sure there are still worforce optimizations possible and some of them long overdue (backoffice, people that stopped expanding their knowledge/skills), however, more experts and movers/shakers are leaving or are being terminated because they got on the bad side of someone above them. Makes you wonder how those unrealistic budget targets that continue to be set should be met? Are they set so high to avoid variable pay outs? How proposals should be written without the experts to write / make the difference? How work should be delivered and revenue generated without the staff to do so? Very sad...

Anonymous said...

Agree with comments above, Sanjiv was probably wondering (like everyone else) when the 'growth' phase would actually happen. Instead he's been asked to carry on with the mass cull and keep getting a kicking for doing so. I don't blame him for leaving. I left CSC not so long ago - the grass is definitely greener.

Anonymous said...

You know it is lost on me why anyone would join CSC or continue to work for them. Apart that is for the mercenaries who have joined up to drive down costs further and get out with large bonuses after a couple of years.
I left years ago after several years of cost cutting with no end, including:
an outright ban on training,
seeing staff go to client meetings with a separate PC screen in order to use their lap top because the lap top screen was broken when the boss wouldn't buy a new one,
seeing staff break down due to stress of working 70 hour weeks - with the boss asking that such events be covered up.
being told that 6 hour long haul flights had to be done in economy class while the Little Git who oversaw Travel and Procurement blagged First Class for himself.,
ditto car hire, cheap small cars for the plebs, limos for the Little Git.
double ditto hotel, cheapest for the plebs, 5 star for the bosses
Or carrying around a mobile phone the size of a brick that only half functions - no replacement again, while being harassed every month to keep mobile calls down even when on 24 hour call, while the Little Git (yes him again with his free latest model phone) had the highest phone bill of anyone in Europe.

Anonymous said...

Where's the sex?

Anonymous said...

It might come as a surprise to some but what CSC is doing to its staff isn't frowned on by our clients. Sure enough people at the lower end of the hierarchy might show frustration dealing with CSC, but the guys at the top don't care too much. If anything it's lessons learned for them.

Let me give you an example, BAE is a huge account for CSC, anybody in CSC will tell you that the offices in Preston and Chorley have few BAE staff left in them. But still they renewed with CSC.

There are many more examples. Basically when a regional GM comes in, he gets given targets by the CEO, his bonus depends on meeting those targets. The bonus isn't 5-10k, it's potentially in the hundreds of thousands, maybe even million. So the GM basically does whatever he/she can to meet the target in order to get the bonus. Now the sensible way is by winning new business. But if that doesn't work it's done by cutting heads.

Making the lives of 6000 staff miserable for a million pounds... And from the 6000 getting rid of 700. Sounds like easy money.

The corporate direction is to reduce the headcount. That's always going to be BAU. They know it's easy pickings. And don't forget Lawrie benefits also from the increased revenue.

Paying 450m for Xchanging, they paid cash. You don't really think that people on both sides of the fence won't suffer?

What is despicable is these execs openly bragging about how wonderful their life is (a certain anand take note) and the plebs are told hey we are coming after you again next year.

UK revenue this fiscal quarter is on par with the US. Yes you heard correctly. Yet UK is still facing more cuts. Union and UKEF take note. Whatever your doing is actually BS. It doesn't mean anything. When you actually win a battle then share the news. I have heard first hand that UKEF go all guns blazing but they actually get slapped down. They are there just to show its a democracy. Any fool who thinks they make a difference is deluded.

Enjoy the ride for as long as it lasts. When you don't have a job then we have to look for a new one. Don't come into work on your day off, don't stay up late at night, don't work weekends. Do the absolute minimum because guess what.... The company does the absolute bare minimum for you.

Anonymous said...

Interesting comments from Reing in a quite recent email:

As CSRA continues the extensive process of integrating two legacy organizations, our CSRA HR Integration and Operations team is behind the scenes reviewing each and every process and policy on both sides to pinpoint efficiencies and redundancies. CSRA is a new company, and while we respect the past practices of both organizations, we are keenly focused on streamlining processes and adopting new policies where necessary. We have much work to do as we integrate the companies to create the conditions for success, so bear with us as we shape the future offerings of the company.
We see a few immediate needs and priorities that we must support, including separation (voluntary and involuntary). We believe in supporting every employee from the day they join CSRA until the day they leave CSRA. Our role in HR is to provide the framework and support to enable a smooth transition from “hire to retire.” There will be changes in procedure with this new path forward.

It appears that once again the ominous handwriting on the wall has returned.

Anonymous said...

So CSC has put a number cruncher in charge in the UK.
http://www.theregister.co.uk/2016/02/01/csc_boss_gossain_is_an_exexec_on_the_payroll_no_more/
"“It doesn’t matter how this is dressed up: either he [Gossain] got fed up or Lawrie recycled him. If so many people were successful at other organisations but don’t last under Lawrie, it raises some questions,” one former senior CSC person told us.

Insiders claimed in 2015 and 2014 that customers were already feeling the pinch from cost cutting in terms of service delivery, and the complex organisational matrix slowed decision making."

Anonymous said...

Interesting to read Lawrie's latest email to employees. He reminds them on CLEAR values and how well they are respected except that most managers including himself do not stick to them. Policy: Coach and cheap hotels for everyone. Reality: Not for Lawrie & some selected peers. Wish: Communicate and deal respectfully does not happen. Reality: no communication and mobbing by frustrating employees with processes of approvals for even the smallest item. At the same time complain about lack of can do entrepreneurial attitude and lack of progress. Decisions are close to impossible due to the system Lawrie and his closest peers have setup. The lower level employees keep it alive. Should you ever report something to the ethics hotline, do it only on the phone and by hiding your name, number, etc. Those that have reported anything have been terminated quickly thereafter. He claims they continue to invest in their people. There is no investment. If you are a manager with people and budget responsibility, you have no responsibility at all. Trainings are prevented. Team meetings can not happen. Travel is a pain. Any tiny decision is requires GM approval. Growing a team is almost impossible and requires endless approval cycles that send any good candidate away. Should you have interviews with CSC, make sure your fixed salary is as high is possible because your will never see the variable component due to unrealistic targets.

Anonymous said...

IBM is dumping their stacked ranking system. Mikey loves to imitate IBM. Will he follow their lead? http://www.businessinsider.com/ibm-changes-its-employee-reviews-2016-2

Anonymous said...

it is !

Anonymous said...

And so it goes on - anyone who is still at CSC should start looking elsewhere - the grass is certainly greener as stated by someone earlier. There are no pay rises, promotions, training, or managers at any level who care two hoots about their staff they are too busy looking after their own unsafe jobs! I am surprised CSC wins any contracts - it has no unique services and no stability in any way. The latest UK director leaving is a joke - what lies they say when they join and a few months later they go - wonder who is next in the seat - all that is needed is an ability to lie convincingly (not that any CSC staff believe the rubbish that is spouted), travel the world and make ooh aahh noises and have another job lined up as they wont stop long. I love this blog it gives me a good laugh - I am so glad I left... after xteen years.

Anonymous said...

Well that's $14,000,000 down the drain http://www.bizjournals.com/washington/breaking_ground/2016/02/csc-sues-finmarc-over-falls-church-land-deal.html
This crowd just can't seem to do anything right. Even down sizing an office complex goes wrong.

Anonymous said...

http://www.theregister.co.uk/2016/02/01/csc_boss_gossain_is_an_exexec_on_the_payroll_no_more/

Anonymous said...

More layoffs at CSRA a couple weeks ago. On the plus side, we have won a nice contract with the SEC, but with employee morale at absolute rock-bottom it remains to be seen if we can fulfill it or if it turns into another NHS debacle.

Anonymous said...

@Blog owners...Time for a new post I reckon with the Q3 earnings call...