Friday, 4 November 2016

CSC Q2 FY2017 results – It doesn’t matter anymore



In early 1959, just around the time CSC was founded, Buddy Holly made the US charts just after his death with a song called “It doesn’t matter anymore”. The title of this song seems to describe well CSC’s announcement of its Q2 FY2017 results this week. 


Who cares about CSC’s results any more? Nobody its seems. The share price hardly moved after the announcement, and some of the Analysts who have covered CSC for a long time either did not join the Earnings Call or were represented by a stand-in. Those who were there each asked a question to denote their attendance and Messrs Lawrie and Saleh went through the motions of answering without too much excitement or enthusiasm. 


EPS was slightly above expectations, on a non-GAAP basis as always. Revenue showed year-on-year growth, but this seems to be due to the impact of the inclusion of UXC and XChanging. 

Mike Lawrie re-iterated the growth in next-generation offerings, talked about a new go-to-market alliance with PwC, and said that low cost centers now accounted for 50% -55% of the workforce, expected to grow to 65%-75% in the next couple of years. He also mentioned that after moving resources from higher cost to low cost centers the next step would be to remove them completely via automation. 


The Analysts asked a few innocuous questions and the event was over. Not surprising. The only thing of any importance for Messrs Lawrie and Saleh today is ensuring that there are no bad surprises which could jeopardize the merger with HP Enterprise Services, or cause the pricing or its balance to be brought into question. (The current plan is that the “NewCo” , (Everett SpinOff) will be owned 50.1% by former shareholders of HP Enterprise Services and 49.9% by CSC shareholders). So far they are doing a good job in that regard and they do not expect any SEC regulatory issues with the merger. 




And the futures of the CSC employees in all this? Who knows! But as they reflect on their options for the future, they may find the last verse of that Buddy Holly song to be pertinent: 

"Well, you go your way and I'll go mine, 
Now and forever till the end of time, 
I'll find somebody new, 
And baby, we'll say we're through, 
And you won't matter anymore".

56 comments:

Anonymous said...

Hate to say it but...

You say that nothing happened to the share price.... but its currently $60.92 - a new record and over the general recent trend of $56 ish.

And that's not systemic it seems - that's CSC doing the moving.

I think that Mikey is good at manipulating the share price is not news though. What is obvious through all of this is that the fortunes of the share price are inversely proportionate to the actual bit where CSC does IT for people.

The ever increasing share price is an indicator of how the value of the company is exiting into the pockets of wall street, leaving a sucked dry husk behind.

Anonymous said...

Great for the shareholders but not for the staff though. Just before I left I heard it was adopting Accenture Pay and Review structure, which explained why they did peer reviews and comparisons this year as it was different from the past and a lot of people where marked down despite some really good work esp on the big bids they won and still got market down.

Rumour has it Mike and Gang want to lower wages and are no longer going to market paying market rates and like Accenture they are waiting to mess with the car allowance buy brining that down also.

Though the final death call won’t be felt until mid-next year when they formally link up with HP, it’s going to be brutal across all areas. HP has already started cutting back on staff and so have CSC in prep for next year.
The question remains who will be leading the company Mike or Meg, the rest of the staff are cannon fodder for them to be used at a flick of a finger and will be laid out to waste, while they fight it out to line their pockets and become ever more power hungry dictators.

Anonymous said...

On El reg http://www.theregister.co.uk/2016/11/04/csc_ceo_pay_off_spent_millions_to_grow_sales/

"According to an SEC filing earlier this week, Lawrie is on course for a $44m payout once ES is brought on board; CFO Paul Saleh could get $14m; Stephen Hilton, head of GIS, some $12m; $11.1m could go to GBS head James Smith; and William Deckleman, legal counsel, could get $9.4m."

if you have deep pockets - they needalot of filling

Anonymous said...

http://www.theregister.co.uk/2016/11/16/the_only_thing_worse_than_working_at_csc/

The only thing worse than working at CSC? An Xmas redundo programme at CSC
Outsourcing giant pops one in this year's sack

- Left few years back, nice bonus this year, summer party, christmnas party all lined up. Free food and drinks. Why would people want to stay at CSC with this burden of job insecurity... oh yeah.. no hopers who are stuck until pushed.. good luck 2017! You will need it.

253 jobs in CSC India if anyone looking.

http://www.csc.com/careersin/ds/92146-csc_india_job_opportunities

Anonymous said...

"He also mentioned that after moving resources from higher cost to low cost centers the next step would be to remove them completely via automation."

How appropriate that Humans is back on Channel 4. This show is Mike's vision of the future.

Anonymous said...

Nice.. so soon enough there will be almost no employees left.. just some automation.. but who will manage the automation? - Good thing I left that company... Mike will bleed it dry

Anonymous said...

Ok, here's something to chew on. CSC pushed off and merged NPS with SRA and from that union came CSRA, targeting mostly gov contracts. In recent times we see Xerox splitting with her better or worse half becoming Conduent. Likewise, big on gov contracts.
Lawrie at one point some months ago said that 'all options are on the table.' This article dated to this past summer noted some interesting advantages to the CSC/HPE deal if Conduent got pulled into the mix:
https://www.linkedin.com/pulse/why-folding-conduent-hpe-csc-merger-might-far-fetched-ryan-blanchard
Thoughts?

Anonymous said...

Indeed. Another 499 UK&I roles have been provisionally identified that could possibly be removed. As vague as that sounds, bet your bottom dollar between 8 and 10% of what's left of the current UK workforce won't be employed next financial year.

Anonymous said...

Anonymous21 November 2016 at 19:07: Everything is possible i guess. I just don't understand one thing. That is that CSC sold off it's US GOV part to become CSRA. With that move, CSC GBS could be sold off to a none-US company. - But if CSC/HPE is to merge with the Xerox spin-off... They will again be in the game of having Gov. customers... and since Mikey wants to off-shore, i can't really see how they can pull this off, without keeping some employees locally to service Gov. customers... - Some systems still can't be off-shored. - Not even to a automated facility. - But i guess everything is in play right now, just to keep up the stock prices.

Anonymous said...

So pleased I left CSC. Soul destroying. Interestingly, I get the impression that people can't even be bothered to comment on the stories anymore. Perhaps, no-one gives a shit about CSC any more. I remember working for them when they were a force to be reckoned with - the "sleeping giant" that didn't sing from the rooftops but insidiously won megadeal after megadeal. But now it's 2016 and they've been raped and left in a dumpster by the money men who only care about how much they can line their pockets before they die, even though they'll never live long enough to spend it all. Companies come and go, assholes get rich off the back of it. C'est la vie.

Anonymous said...

I too thought that Lawrie wanted to stay away from US contracts and focus on the cheap labor available overseas. But then I read that a lot of the bread and butter for Hewlett Packard Enterprise comes from government contracts. I suppose that you go where the money is.

Anonymous said...

About $3bn from HPE is Federal contracts. So $3bn of the headline $26bn merged company is money that won't ever be in the CSC-HPE in FY18. Whether they spin this bit off permanently or just do something that means it's set to one side until the CSRA non-compete clause is up is a moot question though. $3bn of revenue is not to be sniffed at - its 50% of CSC's current revenue.

HPE by the way seem to run those Federal contracts using cheap labour in Puerto Rica, the impoverished citizen of which are legally US citizens.

CSC in its dying days of NPS moved jobs to rubbish places ("cheap") in the USA, HPE it seems managed to drive that to somewhere even cheaper.

Anonymous said...

CSC at the leading edge (for once), embracing the principles of DevOps and applying them to the business domain...
CSC - Continuous Staff Cuts.

Anonymous said...

Anon 30 November 11:45. Alternately sell the $3 billion Federal business to CSRA, then declare a big dividend with the proceeds of this sale. This will drive the stock price up, so exercise your stock options and put more money in your pocket.

Anonymous said...

Good idea, but not too CSRA who I believe have done less well than CSC since the split and couldn't find anything like the money needed to buy that.

Anonymous said...

Ah! Here's where it might get interesting. Maybe at present CSC can't compete against CSRA for gov contracts until non-compete has expired, but CSC could enter gov contracts held by HPE and gain advantage with incumbency status for re-competes down the road. Similarly, the earlier comment about a speculative Conduent merger with CSC/HPE would give CSC access to Xerox (Conduent) Fed or State contracts.

Anonymous said...

Maybe, maybe. I'd have thought that after Mikey making such a song and dance about ditching NPS and also pointing out that CSRA wasn't then doing very well and how much better CSC was out of it, that it would be hard to positively move back into Federal business.

Then again, markets don't give a rats arse about anything really, all they care about is the share price rising and they don't ask too many pointy questions about how its done.

Anonymous said...

I don't have words to describe how terrible this company is to employees. It is hell, and people is so used to the stink that they think it is normal

Anonymous said...

"CSC CEO: We’ll hire thousands in India in the coming years" http://timesofindia.indiatimes.com/business/india-business/CSC-CEO-Well-hire-thousands-in-India-in-the-coming-years/articleshow/54971190.cms

Anonymous said...

Before we replace them with automation...

Anonymous said...

that is a wonderfully insightful and considered comment labeling people who work very hard as "no hopers"..... NOT. Some people do not have the opportunity to travel to India and work for less money but it would seem you do.

Anonymous said...

The HP "merger" has saved CSC from being sold to an Indian pure play. Fat Mike still thinks India is the solution to everything, not cost effective any more and new UK Border Laws severely restrict access for KT

Anonymous said...

Just think of all those $$ millions that could be saved and handed out as shareholder dividends if they offshored the L1/L2's to low cost countries on lower salaries and fewer $0 stock options. The top really would then be espousing their beloved CLEAR values and leading by example. Alas, cost cutting only seems to apply to the lesser lifeforms - those who rack up the client billable hours.

Anonymous said...

"CSC's Top Execs Eligible For $90.5M In Possible Payouts Thanks To HPE Enterprise Services Deal"

http://www.crn.com/news/channel-programs/300082698/cscs-top-execs-eligible-for-90-5m-in-possible-payouts-thanks-to-hpe-enterprise-services-deal.htm

Anonymous said...

Payouts on this scale are a disgrace and totally unethical - employees at CSC and HPE should do some soul searching, consider the integrity of the Exec's and question if they wish to continue lining the pockets of these folk who have already milked the company of millions already. My advice, along with many here, would be to look for another role and LEAVE.

Anonymous said...

Totally agree with 21 January 2017 at 21:45. As Theresa May said at the WEF in Davos last week:

"But I think what people feel very often is that sometimes they see people playing by – appearing to play by a different set of rules. Sometimes there are some companies, the behaviour of which, or perhaps individuals within them, suggests to the public that actually there’s one set of rules for those people and another set for ordinary hardworking families."

Anonymous said...

The move of a company looking to raise operating income while not raising debt. And why raise operating income when your year-to-year net income shows almost a billion dollar INCREASE (http://phx.corporate-ir.net/phoenix.zhtml?c=109974&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTExMjEyMjU5JkRTRVE9MCZTRVE9MCZTUURFU0M9U0VDVElPTl9FTlRJUkUmc3Vic2lkPTU3#sE8AE245A3AC55B0C81F56E1CE8B9DDBB)?

http://www.bizjournals.com/washington/news/2016/12/27/csc-looks-to-raise-250-million-by-selling-ious.html

punchnrun said...

NewCo Leadership announcement today. 37 positions announced, 3 women. Leading the way to the future.

Anonymous said...

The "selection process" was from CSC L2's, and HPE L2's. The result merely tells you the current holders of those posts were predominantly men before. Its no surprise they didnt magic up 50% women, or do you want tokenism/positive-discrimination rather than the best candidate from the tiny pool of two choices?

Anonymous said...

and one of those females is Mike's arm candy.....
Lucky her

Anonymous said...

That is an absurd thing to say, so what there is only a few women on that level. How about we fire you and get two women to replace you? Would that make you feel better?

If the pool was mostly men, then expect mostly men to get the jobs.

punchnrun said...

Anonymous correspondents defending CSC/HPE. Correct the Record?

Anonymous said...

Has Craig Wilson been put on leave / deemed surplus to requirements?

Anonymous said...

lol, if you read carefully nobody is actually defending csc/hpe's poor record of recruiting/appointing/promoting women to prior csc/hpe L2 positions. We're merely saying in a shoot-out/elimination between the two L2's for the one new L2 post in newCo, if both incumbant candidates are men the outcome will also be a man.

How many csc/hpe L2 women didnt get the sole job in newco?

Anonymous said...

That looks like a real pity. I only heard him speak a couple of times but he came across as a genuine and honest guy who called it like it is - you could tell pretty quickly he didnt come from within CSC and hadnt been assimilated into the evasive gray borg - he was a breath of fresh air. For that reason I wondered how long he'd last long under trigger-happy Mikey. It will be a shame/loss if he's not got a role somewhere, even though another Wilson has got the newco UK&I post.

Anonymous said...

So another 1101 UK redundancies are coming .... I wonder when those in the know will put the rest of us in the know

Anonymous said...

Have heard 20% headcount reduction in UK - to be announced in next few weeks.

Anonymous said...

Nothing matters anymore EXCEPT HPE and we now know who is losing out on the merger... CSC employees.

So lets hope some of the scabs who went to Copenhagen to break the strike get made redundant this time.
http://www.theregister.co.uk/2017/01/25/unite_csc_uk_readying_jobs_massacre_as_1101_head_put_on_chopping_block/


Unite: CSC UK set for 'jobs massacre' as 1,101 heads put on chopping block

Anonymous said...

Is the Nick Wilson who will be leading CSC/HPE UK the same Nick Wilson who led CSC UK with such distinction and success about 8 or 9 years ago?

Anonymous said...

Yes

Anonymous said...

In the words of Pvt Fraser - "You're all dooooomed!"
Nick Wilson's only good act was to send every UK employee chocolates at Christmas, what a tool!

Anonymous said...

If you want to reduce the staffing level drastically and quickly, Nick Wilson has the right management style. Otherwise.........

Anonymous said...

OK, Nick Wilson may not be that great (an under-statement to say the least - I was still around unfortunately while he was with CSC) however why put all the blame onto him. After all, CSC is a heavily matrix'd organisation. I left several years ago but keep in touch with a few poor sods who still remain caught in the fray and it’s interesting that despite what I hear from these folks, the talk on Cassandra is only ever about Mike and his immediate reports. I know it’s no longer my place to comment, however from what I've been told, it's the people at the next couple of layers down in the UK that are CSC's true problem in the UK. From what I hear, the two’s layers of GBS under Nick Wilson are absolutely atrocious, are not "apps people" and wouldn't know an app from a pile of turds. The same two layers in GIS are even worse and appear to want all accounts to run as if they were in exit mode (hardly conducive to getting more business). And apparently Consulting are still half way up their own asses and unable to run a successful engagement to save their grannies (so nothing changes there). When I left, things were bad and it was obvious that the main senior day-to-day GBS/GIS/Consulting management within CSC in the UK couldn't run a piss up in a brewery, and by the sounds of it, it's got even worse. Which is interesting in that even in my worst nightmares, I couldn't envision how senior management could screw things up more, but obviously that it what CSC is good at, even if nothing else.

Anonymous said...

I couldn't agree more with that statement about "senior" management!
Totally divorced from actually running a business and developing good client relationships - more concerned with how many people they could bully and how early they were in the offices in RP or latterly Kings Cross and then how late they stayed, god only knows what they actually did. Clearly the direction from the top is blinkered but the lack of respect lower down developed an atmosphere that was toxic.
I've forgotten the number of days I worked late and away from home for no thanks and just the odd aggressive email/phone call from HR (don't get me started on them!) to ask why I was working so many hours.
My new employer is a quantum leap, with regular manager 121s, a very collaborative environment and no CSC-style politics. Normal people doing a good job and teams working like teams.
For those not waiting on a BAE or RMG pension, please get out before it gets worse, if that's possible

Anonymous said...

There's not much management from the UK level anyway. Those people live in a tiny bubble that is just about revenue figures. They don't actually manage an IT company, let alone LEAD it. Even within their tiny remit, its even tinnier because Mikey controls and oversees every aspect of what they do. Basically, its just someone else to blame when Mikey's vision fails to achieve the numbers and then someone to make more staff cuts. Its definitely no more than that.

Anonymous said...

Rumor is the CEE leadership will be taken over by HPE managers. Confirm?

Anon said...

Next thing you know they'll be bringing back Guy Hains.

Anonymous said...

Didn't he bite the bullet in Skyfall?

Anonymous said...

As a clear indication of just how incompetent CSC is, I know someone who was told they could leave end Nov 16 but as of 31 Jan 17 still had not received their remuneration numbers to consider. Similarly I applied for VR at end Nov 16, have been advised my departure has been approved, yet I too am still waiting for numbers.

If the 499 redundancies announced last year were meant to be completed this Financial Year, including the 3 months PILON, they appear to be missing the target about as well as they miss the point over the true cost of using offshore labour!

Anonymous said...

Glad it's not just me, although I did receive an offer, which they calculated wrong. Now stuck in a queue for it to be 'investigated' and apparently they are inundated, so no clue when they will get back to me. Still, being paid to do nothing cannot be bad. Keep up the good work CSC/HR. You may want to recruit a few more people before you start on the next round in the UK.

Anonymous said...

It will be an interesting few months at NewCo for the lucky, or unlucky, employees who will remain from CSC or HPe, I agree with the previous comment that the CSC UK&I current management couldn't run a piss up in a brewery, but hopefully they are about to be found out and shipped out. I assume that there is a similar problem at HPe, and again, hopefully, they will go too. However, I also expect massive job cuts for employees of NewCo in the first year, but since we have been under a restructuring program at CSC since about 2010, with redundancies announced every year, sometime 2 or 3 times a year, it will just be business as usual for ex CSC employees!!

Anonymous said...

The comments on the most recent post are not view-able...

Anonymous said...

Seems a repeat of a few months ago where it does not matter which browser you use the comments do not show, can someone please fix?

Anonymous said...

@BusyBee - blog comments seem hosed again. Comments wont expand on the Feb 4 blog. Maybe Moneybags Mikey has figured out what character sequence to put into a comment to stop the plebs from discussing real news/facts ...

Uncaught TypeError: Cannot read property 'href' of undefined
at Ug (common.js:343)
at Eg.Zb (common.js:338)
at Eg.K.se (common.js:175)
at Object.d [as success] (jquery.js:39)
at i (jquery.js:39)
at Object.fireWith [as resolveWith] (jquery.js:39)
at y (jquery.js:41)
at XMLHttpRequest.c (jquery.js:41)


Anonymous said...

@Busy Bee, the blog comments seem broken again. They wont load on the latest blog. Or maybe Moneybags Mikey has paid russian hackers to hide real news/facts. He'll be hiring Sean Spicer next.

Anonymous said...

Apparently this problem can arise from deleted comments. This link seems to describe the situation: https://productforums.google.com/forum/#!topic/blogger/cD7q88q_tV4;context-place=forum/blogger

The comment in question had this timestamp:
published: {$t: "2017-02-16T17:44:38.477+00:00"}

(although perhaps there was more than 1)