Sunday, 10 July 2016

The King Is Dead



Over the past few days, there have been some interesting 
comments in the Cassandra blog about the direction CSC is taking.

One school of thought is that Mike Lawrie has taken the right 
steps to respond to fast changing market conditions, and the changing expectations of analysts and investors. In doing so, he has not only saved a company which came close to bankruptcy just 4 years ago, but has revived it and given it a future via the planned merger with HP Enterprise Services.  This view says that Cassandra’s skeptical view of CSC’s future is all wrong.

Another school of thought is that CSC was being kept alive, 
and its share price maintained, by intelligent financial engineering and by hollowing out the company’s intrinsic value in the quest for quarterly Earnings Per Share. In this view of the world, at some point the financial markets and the company’s clients would figure out that CSC is more style and window-dressing than substance and when that day comes, CSC share price will come down to earth with a jolt. Cassandra’s skeptical view of CSC was broadly in line with this scenario.

In a certain way, it does not matter any more whose view is 
more accurate. The merger with HP Enterprise Services will impact CSC’s future massively, the big question is “how”. We all know that such deals are usually announced as “mergers of equals”, but that is just marketing spin.  After the merger has happened, we will find out which company has really taken over and subsumed the other. The fact that Mike Lawrie has been announced as CEO of the new company is not necessarily good news for CSC employees. Lawrie is after all the best placed person to “vaporize” CSC into HPE if that is the plan.

We at Cassandra are not hopeless nostalgics yearning for the 
time when CSC was a successful, highly regarded and a great company to work with or for.  The only thing we are really nostalgic about are the days when CSC employees were treated with respect by the management. But the market has changed, the customer needs have changed and the industry has changed forever. Elvis is dead and no amount of reported Elvis sightings will bring him back. So it is with CSC.  The merge with HPE will probably be the biggest change CSC has experienced in its history and nothing will bring CSC back to what it was.


45 comments:

Anonymous said...

Well said.

CSC was once in the UK a good company. Optimistic, talented and going places.

After 5-10 years downward spiral, I left.

Now work in another company which is optimistic, talented and going places.

The crud that is senior management in UK (that is department level and above - not team lead minions) are holding onto gross over market rate pay and part time home working (paid for full week and do little).

They have destroyed the company as much as Lawrie did. Removing lower paid staff to keep inflated wages/packages.

Anonymous said...

http://www.channelregister.co.uk/2016/07/04/hpe_july_redundancies/

Nearly 900 UK-based personnel at Hewlett Packard Enterprise are to be released into the wilds at the end of this month, according to the redundancy schedule seen by The Register.

The majority of those made to walk the plank come from Enterprise Services, which is the area that has been hit hardest in HPE’s continuous cost-cutting efforts that started in 2012.
......

Anonymous said...

I second that - and a company is made of its employees - treat them like £$%" and the company is no more than that as well. My last 5 years at CSC was a constant unknown causing stress and continued disappointment for me and my family - but did CSC care - nope managers protecting their crummy little jobs and damn the staff. Glad I am out of the place ........

Anonymous said...

I feel that the CSC-HPE merger will be a merger of two equals - two sets of equally bruised and battered staff and a management team with not the slightest clue how to turn their business around effectively.

On that basis we should find people as unfortunate as us.

Anonymous said...

CSC has lodged an SEC filing disclosing that Mark Foster has resigned as non-executive director. Foster is a former CEO of Accenture's Management Consulting business.

Why has he resigned only 11 months after his appointment?

Unknown said...

The India unit is having an annual pay raise for good performers. Not sure about UK/US/AUS though.
Well, Mikey always said India is the fulcrum of CSC's growth story... he is finally putting his money where his mouth is.
The HPE merger is a watershed event with no parallel in CSC's history. How things will pan out is well nigh impossible to predict... there is no precedent to go by.
One thing is almost certain, there will be more culling.. and likely to be on the HPE side of the universe.
There is no one left to cull in CSC UK !!

Anonymous said...

HPE have been just as blood thirsty as CSC if you read The Register.

Politically, I think you will find where stuff is duplicated that CSC also has to take a shafting.

Anonymous said...

Each time I look at this site I think about how happy I am NOT to be working at CSC any longer. Leaving concerned me, it was a big decision, and I hoped to be laid off so that choice would be taken from me but when that did not happen I chose to leave. What a relief it has been! Thank you Cassandra for being the only sane voice providing information on CSC.

Anonymous said...

CSC's growth story - have I missed that somewhere - what growth?

Anonymous said...

No growth since 2008 when the revenue was 16.9 bn USD. Despite all reorgs and acquisitions revenue is down to 7 bn (ok w/o NPS piece of course)

Anonymous said...

Come now people, dont be churlish, theres a CSC growth story almost everywhere you look...
The salaries for the non-exec directors have grown.
The salaries for some L2's have grown.
Mikeys $0 stock-options have grown (almost infinitely compared to what he's paying for them).
The regularity of $0 pay rises has grown for the billable staff who earn the revenue/profit to pay for the NED/board/Mikey overheads.
The cascading recitation of "we're out of the get-fit stage and into our growth phase" has grown, contradicted at regular intervals by growth in the scale and regularity of redundancy programs.
The number of un-orgs has grown (by un-org I mean undoing Mikeys Boston Consulting re-org/operating-model and putting the company back almost exactly how it was before he meddled in the first place)

An abundance of growth.

Anonymous said...

http://www.theregister.co.uk/2016/07/22/hpe_redundancies/

Two peas in the pod.... slash and burn....

Asking for volunteers... what a farce.. that is the first step to compulsory.. CSC UK gives people some extra money - cough cough to go voluntarily ... wonder if HP has the same morals (Lack off).

Anonymous said...

CSC UK only gives some people extra money if they're on the rock bottom statutory minimum redundancy terms. HPE (from your link) offers better than rock bottom terms ... "In Q2, the company put 1,092 ES staff on the chopping block, then 900 in Q3. Unlike IBM, these staff did not leave on Statutory Minimum terms"

In a race to the bottom, I'd put CSC a furlong ahead.

Anonymous said...

I'll defend CSC for once, as CSC's UK redundancy terms (on the "standard" UK contract, of which many still were never moved to) are above the legal minimum which is:

half a week’s pay for each full year you were under 22,one week’s pay for each full year you were 22 or older, but under 41 one and half week’s pay for each full year you were 41 or older

Length of service is capped at 20 years and weekly pay is capped at £479. The maximum amount of statutory redundancy pay is £14,370.

CSC don't cap it as £479 a week (you get your full rate of weekly pay), although you will pay tax on any amount over £14,370.

Obviously they only pay more if you are a higher earner, but...

Anonymous said...

exactly the same here. So glad I left, and each time I read the Cassandra commentary I'm reminded about all the corporate bs that I've left behind. Being able to do work without thinking "no wbs code, no work" is SO EMPOWERING. I even got a pay rise for taking pride in my job and being recognised for doing it well, without fear of a lopsided bell curve rating system.

Anonymous said...

http://www.computerworld.com/article/3101884/it-careers/csc-announces-layoffs-in-advance-of-hpe-merger.html

Anonymous said...

Always worth reading this other site too, also has as much happy news as Casandra:

https://www.thelayoff.com/computer-sciences

Anonymous said...

Surprise surprise, once again no pay out of variable salary components in CEE region for FY16. Unrealistic OI gate thresholds and revenue/OI targets continue to make variable pay the worst option for anybody starting at CSC in CEE (and elsewhere) unless you are in sales, your name is Mike Lawrie or you belong to his close L2 circle.

Anonymous said...

The UK employees have not had their annual 1st July non pay review communications. Appalling that no comm's have been issued

Anonymous said...

If my area is typical then the US has only just been told.
Nada, zip, zilch and bupkis. Again.
As told to us "...only a small percentage of the highest performers on each account are being considered for a merit increase this year"
And now we have a "Culture Questionnaire" to be completed. Or perhaps it's only for some of us. Perhaps it should be "Kultur". And, if you haven't yet completed it, they bug you. So you know they know who's supposed to be telling the top dogs how wonderful they are, how important the CLEAR principles are and so on.
Not me. It's just CLEAR with how much contempt they regard the proles.

Anonymous said...

hehe, and anonymous - hehe. Sorry, have to clear my throat...

Anonymous said...

"...only a small percentage of the highest performers on each account are being considered for a merit increase this year"

..while the remainder of the highest performers get bugger all, despite being highest performers.

Anonymous said...

reminds me of the National Lampoons Christmas vacation - when the boss did away with bonus and not tell the staff - but hey they got enrolled in jelly of the month club lol = no comms to staff there either!

Anonymous said...

Maintain your self respect and get out now. It's better to be treated badly and get out, than to be treated badly, and then fired somewhere down the road.

Anonymous said...

The head of UKNLI tells us that we are getting zero pay raises.

He also tells a story about how the average pay of CSC employees is far too high and that Accenture's figure is much smaller.

I think they only need to look at the publicly available executive pay figures to work out why that might be.

But no, instead of that they squeeze the low paid by not even giving them a chance to work hard to gain more pay.

Isn't this a shining example of what is wrong with society today?

Oh and I heard that India are being told via WorkDay at 6pm tonight that they aren't getting any raises either. Typical cowardly management.

Anonymous said...

Doesn't UKNLI stand for "UK National Lifeboat Institute"? Things must be really bad if they need to be involved. Are they at least distributing the lifebelts for free?

Anonymous said...

I believe payrises are happening in UK.. maybe it is targeted for those who deserve it.

Anonymous said...

There is a difference between "I know" and "I believe"

Anonymous said...

You mean like the self perpetuators who appraise themselves and have it approved by their remote location superiors who have no counter information?

If you want to know if you had a payrise, check your reference base salary in Julys payslip. If it's the same as June, you didn't get one. Remember to fill in your workday objectives though, cos exceeding those will merit a payrise... no wait... time for a year of just meeting requirements methinks, anything else would be an exertion.

Oh, and that survey only 25% of the workforce completed, like that doesn't tell them something already...

Anonymous said...

Managers and team leads always do ok.

When your line manager does the "were all in the same boat" "I got nothing as well"... they are probably lieing..

Management in CSC look after themselves.

As an ex manager... doing very well now thankyou.. I had some great payrises at the expenses of my direct reports.. what have I got to say about that now? LOL

Anonymous said...

Q1 earnings report.... everything is amazing, amazing I tell you... (yeah, we made a loss)

Anonymous said...

I can't access the new post's comments. Anyone else having an issue?

Anonymous said...

Yup, every browser I've tried...

Anonymous said...

Still not working...

Anon said...

Is this intentional?

Anonymous said...

Not working for me anymore, please fix.

Thanks

Mikey

Anonymous said...

The site must be maintained by CSC then - well and truly broken

Anonymous said...

But costs are now lower which maintains the share price nicely.
Doesn't matter if the actual solution works or not...

Anonymous said...

Bug report - CSC Q1 FY17 article Aug 10 is broken, can't expand comments section to read or reply. Multiple browsers and platforms.

Busy Bee said...

Works on my pc but does play up on the iPad. Don't know why. Will do more research.

Anonymous said...

same here, PC/IE/Chrome,Android. The comment count spins like it is refreshing, but never stops.

Anonymous said...

News from CSC CEE. They are closing its major HQ in Wiesbaden (700 employees), will let go 200 and outsource another 200 to Eastern Europe. Instead various hubs per industry - it won't stop the shrinking revenue anyway. Workers council up in arms.

Anonymous said...

@Busy Bee - Same issue here with the latest post. No comment possible. Also there have been rumors for years that there are different balance sheets. So one is to screw the employees on variable salaries except Lawrie of course who follows EPS/share price and his best buddies. Along these lines there are reports that the goal setting in terms of global commercial revenue and operating income have been set unrealistic to ensure no variable pay out was possible.

Anonymous said...

Worth a read - http://tech.economictimes.indiatimes.com/news/corporate/well-hire-thousands-in-india-in-the-coming-years-csc-ceo/54971467

Anonymous said...

@Busy Bee - Sites latest post of Aug 10 will not expand the comments section.