Saturday, 4 February 2017

CSC Q3 FY2017 results – No surprise that there were no surprises


CSC’s announcement of its Q3 FY2017 results this week was a “no surprise” event. Which is what we expected. 

Revenue for the quarter, at $1.9bn, was up 14% from Q3 FY2016 thanks to the inclusion of the XChanging and UXC revenue. Non-GAAP EPS was $0.81, some $0.11 above analyst expectations. GAAP EPS was $0.20, but nobody seems too worried about that. Bookings were $2.4bn or 1.3x revenue. Next Gen revenue was up 60% year-on-year. All told, these are respectable financial results. On a geographic basis, the performance was also healthy, but Mike Lawrie made a point of mentioning that UK was the only area to suffer a constant currency revenue decline year-on-year. This not does bode well for CSC UK employees! 

The analyst questions focused far more on the merger with HPE Services than on the past quarter’s results. Mike Lawrie reported that the merger plans were progressing well, threw in a few anecdotes and specifics and everyone seemed happy. He sensibly dodged the questions on the potential impact of the Trump Presidency by saying it was too early to tell. 

CSC–HPE Newco top management has been identified and today the composition of its Board of Directors was announced. We are dismayed that Mike Lawrie has been named Chairman, President and CEO. It is poor Corporate governance to have one executive holdings these 3 roles. How quickly CSC has forgotten the dramatic consequences of the last time one executive held all three roles! There was a good reason to split the roles within CSC just before Mike Lawrie joined. The reason is still valid today, irrespective of the name of the jobholder. We hope that Meg Whitman and the other non-executive directors will show the determination and cojones to provide real oversight and challenge Lawrie as needed in order to offset this concentration of power in one man. 

So CSC successfully moved a step closer to its merger with HPE and to another massive payday for Mike Lawrie.

60 comments:

Anonymous said...

Mikey's pre-merger vengeance on CSC UK was swift though - top management executed followed by 22% across the board staff cuts. In fact, that was all out of the bag before the official announcement of the figures and the analyst call - I guess to head off any questions about "what are you doing about this?"

I don't know if anyone from non-UK CSC ever reads this blog, but I know some of my non-UK colleagues were surprised to hear the UK was getting job cuts. They believed that only their territory was being cut all the time.

There is a huge piece of smoke and mirrors going on to try to hide the slight of hand at a global company level. The cuts aren't GIS/GBS/FSG etc, they aren't US/UK/Australia they are across the full spectrum of CSC.

It's a company spiralling down the plug hole, one inch of bath water at a time.

Anonymous said...

There is a big thread on C3 where people are complaining about no pay rises in 5 years. One person has a poll on whether Lawrie, on taking his huge payout, is either unethical, immoral or laughing all the way to the bank. People are really fed up and not afraid to openly post this stuff.

Anonymous said...
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Anonymous said...

Consider these gems courtesy of Nassim Nicholas Taleb in his book "The Bed of Procrustes".
'The difference between slaves in Roman and Ottoman days and today's employees is that slaves did not need to flatter the boss'.
'Karl Marx, a visionary, figured out that you can control a slave much better by convincing him he is an employee'.
'To see if you like where you are, without the chains of dependence, check if you are as happy returning as you were leaving'.

From Anon:- Life is all your own choice. So choose.

Anonymous said...

Have to say that the C3 "pay raise" thread is something I've never seen before. Sure we bitch on here, we bitch at the water cooler, we bitch at the bar after work but I have NEVER seen so many openly bitch in an official communications channel like that before.

Maybe the worm has finally turned.

On the other hand, no matter how much critical comment, does anyone really think Mikey is about to do a U-turn on this? I think you are dreaming if you imagine the answer is yes.

Anonymous said...

Glad I got out 2 years ago

Anonymous said...

C3 comments are clearly #alternativefacts and #fakenews .....so will be ignored

Anonymous said...

Prior discussions and threads on C3 reveal that no one with any power or that can do anything about it bothers to read them. They might as well be posted here for all the good it will do.

But, if anyone in power sees the poll or comments on C3, you can bet your bottom dollar the "malcontent(s)" will be swiftly fired.

Anonymous said...

> On the other hand, no matter how much critical comment, does anyone really
> think Mikey is about to do a U-turn on this? I think you are dreaming if
> you imagine the answer is yes.

Far from it, he's going to push even harder for more low-cost offshoring, to drive up the share price for those with millions of stock options (ie him and his L2's) and to hell with service/product quality inevitably declining. The stock-option cosy cabal will have cashed out and sailed off into the sunset before that hollowed-out low/no-quality chicken comes home to roost.

The writing has been painted large on the walls at techcon and all-hands. Mikey is driven by spreadsheets of offshore/low-cost ratios and comparisons of company average salary with bargain-basement competitors ($90k csc vs $40k competitors was it?). He's in a race to bottom to compete on cost, rather than compete on quality. So do you think he's doing that to lower the price to the customer, or keep the price constant but increase his own margins and drive up the profit and the price on his own stock-options? He doesnt strike me as being particularly Customer focused, he's Analyst focused. Hmmm, why might that be stock-option king?

There wont be pay rises, there'll just be more and more offshoring. Its the quick way to strip out cost, though he'll be careful to massage the low-cost-country egos and tell them they're getting all these replacement jobs not because they're dirt cheap but because of their capabilty (cant have them putting 2+2 together in the likes of India and realising in 5/10 years time all their jobs will be moving to the likes of China and the newer/lower low-cost-countries, etc)

Hint Mikey - since you're clearly so obsessed with company-average-salary, you could lower the CSC average by ~$500 by offshoring your own overpaid/underperforming job to a low cost country. The analysts will like it, and we know how far you bend to please them.

Anonymous said...

That C3 thread has close to 14k views and 178 comments now.

Anonymous said...
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Anonymous said...

The problem with putting all the eggs in an offshore basket is, others have already done it before CSC. You will be competing at offshore for talent against the pureplays such as Infy, TCS, HCL and Cognizant. They enjoy a far better brand reputation on the campuses (from where the bulk of low cost recruits come) and also have far better training and grooming of graduates than what CSC currently offers. CSC brandname needs to improve at offshore if there is to be a true amalgamation of talent over there. FOr that to happen, there needs to be investment in the employee, and his training, upskilling, salary, perks and working conditions. That needs money, which is owhere to be found within CSC as of now.

Anonymous said...

I agree with your point, but would your assertion that money is nowhere to be found within CSC as of now.

There has been more than enough money in CSC to invest in employee skills develeopment, but it has been used for higher priority items, such as share buybacks, massive dividends and stock options for Mike Lawrie and his acolytes.

Anonymous said...

I wonder how CSC will survive Trump putting a hold on off-shoring. - That move might make it hard for Lawrie to put his plans into effect?

Anonymous said...

It's well known that the Federal Sector selloff was one of the biggest missed opportunities in the IT business world and one which was sacrificed to make a handful of people very rich. Disgusting.

Anonymous said...

NewCo name announced.
Death by Cuts.
DXC, for short.

Anonymous said...

Ueah, does anyone know what DXC is supposed to stand for? I didn't see it anywhere in the press release, which seems odd.

As far as the broader conversation, here. I don't worry too much about Lawrie holding all 3 positions, as Idoubt he'll be staying more than a year or two after the merger. Seems clear that Nefkens is waiting in the wings to take over once Lawrie "cuts and runs" (almost literally) with a fat going away present of high 8 figures (if not 9).

Anonymous said...

I wish I was in Dxc, Hooray! Hooray!
In Dxc Land I'll take my stand
to live and die in Dxc
Away, away, away down south in Dxc
Away, away, away down south in Dxc

Anonymous said...

Doubling Xecutive Compensation

Anonymous said...

DXC.technology ... sounds like one of those companies you find tucked away in a corner of a faceless industrial estate, the type that will fix your grannies computer when she's infected the thing with viruses after opening emails with PowerPoint attachments. CSC never had good brand recognition in the country I worked for and so this awful name certainly wont help towards that. Not that I care - after eleven years I'm finally out, and happier for it.

Anonymous said...

It won't stop all the jobs that are going to Puerto Rico!

Anonymous said...

Did anyone check out the Urban Dictionary?

http://www.urbandictionary.com/define.php?term=dXc

Anonymous said...

DXC...pronounced "dicks". Very appropriate, wouldn't you say?

Anonymous said...

First i saw the new logo, i was thinking:"Hey are we part of DC shoes now?"

Google it ;-)

Anonymous said...

I'll prefer Dixi https://de.wikipedia.org/wiki/TOI_TOI_%26_DIXI_Sanitärsysteme#/media/File:DIXI-Toilette.jpg

Anonymous said...

DXC Technology - what a laugh, as someone said, sounds like a computer chop shop, oh yeah that's exactly what it is! Joke!

Anonymous said...

Is that Mikes new "office for 1"?

Anonymous said...

... the new open office shared desk strategy at flexible customer focused locations.

Anonymous said...

>> Ueah, does anyone know what DXC is supposed to stand for?

lol, the "official" answer is it doesnt stand for anything. The "official" brand consultancy bullshit is ...

"The name DXC is a reference to our mission; leading clients on their digital transformation journeys, being recognized globally as a force multiplier (X), enabling clients to seize the opportunities presented by today’s rapidly changing technologies."


FFS, people genuinely get paid for that kind of contrived babble? LOL - fools and their money.
No doubt the borgs will all have to learn it by heart and recite at will, a bit like the plebs having to know what CLEAR values are despite the execs never showing any.

Anonymous said...

The new logo looks like two phallic symbols (CSC/HPE executives) about to penetrate the X or double feminine symbol (customer/employees).

Anonymous said...
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Anonymous said...

Either Mike is whistlin' DXC .... or we are.

Anonymous said...

Oh, I wish I wasn't in the land of the glutton,

Good old times they are forgotten.

Run away! Run away! Run away! From DXC Land

In DXC's Land, where I was merged in,

early on one April mornin'.

Run away! Run away! Run away! From DXC Land

I wish I wasn't in DXC, Hooray! Hooray!

In DXC's Land my career will turn to sand,

to live and die in DXC.

Away, away, away it all goes south in DXC!

Away, away, away it all goes south in DXC!

There's too many employees, ones that don't matter,

It makes Mike fat or a little fatter.

Run away! Run away! Run away! From DXC Land

Anonymous said...

Dispicable company, that is all

Anonymous said...

Just waiting for VR to come through. Can't wait to leave. UK HR is a complete joke, how Healiss has survived the chop is beyond us all.

Busy Bee said...

Our thanks to those who pointed out the comments had become unreadable.
This has been fixed now, we hope, by using the simpler template as recommended. KISS.

As this issue started with the deleting of an unsuitable comment with some profanity, can we ask those who wish to contribute to the debate to be polite and not swear. Civility is a mark of a civilized person.

Thanks again from Busy Bee Hive.

Anonymous said...

>> how Healiss has survived the chop is beyond us all.

Are you sure he has? The L3/L4 announcement (while not entirely obvious!) had David Bundy as UK&I VP HR
(who?? lol)

Perusing the Workday org charts also shows 22 contractors in HR. Do as we say, not as we do?

Anonymous said...

Anyone know the overall plan for the UK with CSC - I left a while back but it seems the culls are still going on, some good friends of mine are now in the firing line :(

Anonymous said...

>> how Healiss has survived the chop is beyond us all.

Are you sure he has? The L3/L4 announcement (while not entirely obvious!) had David Bundy as UK&I VP HR
(who?? lol)

He's still on Skype/Outlook so obviously hiding like the little weasel he is. Justin Fallon is another chocolate fire-guard too!!

Anonymous said...

To be fair to Martin Healiss and Justin Fallon, they do push back against corporate, but as the informed know, that will only end up one way if you push too hard. It's not their fault. They work in a dictatorship the same as the redt of us that are still there taking our pieces of silver!

Anonymous said...

Crucially the new brand cannot simply be "more of the same". The fundamental purpose of DXC is a fresh start (for clients, staff shareholders alike)! So the attrition and the shrinkage and brutality will end soon as a new company looks to the future. HOWEVER, that probably means a lot of clearing house before 3rd April, especially in the US where labour laws will not afford the doomed any prior notice or safety net.

Anonymous said...

BTW I didn't spot any cooments on this site about this week's parliamentary debate on the cuts at CSC and the possible impact on the NHS. Check out Hansard for more info. if you're interested!

Anonymous said...

http://www.crn.com/slide-shows/channel-programs/300084014/dxc-technologys-corporate-structure-here-are-116-emerging-department-leaders-for-the-new-csc-hpe-enterprise-services.htm?itc=hp_slideshow

Anonymous said...

Sorry, but I do not believe that any sympathy is due to Healiss. The guy hides behind L3/L4 staff at all times. I am about to leave on VR, emailed him the VR mailbox and himself personally a few questions - no response from either. What a "leader". Had he "stood up" for the UK staff, he would no longer be here. The cuts now are all about securing some made up numbers that Mikey has committed to (and to get his $44m bonus). Totally unethical, totally ruining the UK business. Unless HPES have loads of staff ready to step in, I can see nothing but trouble for 2017. Glad I will be out of here soon.

Anonymous said...

Some U.K. Politicians are beginning to think that CSC is about to drop the NHS IT program after taking untold millions from the tax payer for a system ten years late that hardly works. Long before PayMEMore Mike turned up CSC made commitments that perhaps unbeknownst to him they could be walking away from. One assumes if this mess continues those who sold this mess to the U.K. taxpayer while pocketing immense bonuses will be invited back to Parliament to explain themselves,
Also what Ruth considering is this: If this continual degrading of service and staff reduction programs continue the CSC brand and whatever it morphs into will be poisonous for years to come. Way to go Newco.

Read these links and judge for yourself.
Redundancies at CSC - Commons Library briefing - UK Parliament
researchbriefings.parliament.uk › CDP-2...
5 days ago - A debate on proposed redundancies at consulting and IT services firm Computer Sciences Corporation, sponsored by Toby Perkins, will be held in Westminster Hall on Tuesday 28 February 2017 at ...
[PDF]
Redundancies at CSC - Parliament
researchbriefings.files.parliament.uk › C...
5 days ago - Redundancies at CSC. By Doug Pyper. Summary. A debate on proposed redundancies at consulting and IT services firm Computer. Sciences Corporation, sponsored by Toby Perkins MP, will be held in.
Chesterfield MP calls for parliamentary debate on CSC job losses – Toby Perkins MP | Toby Perkins MP
www.tobyperkins.org.uk › 2017/02 › ch...
20 Feb 2017 - Following a meeting with Union reps, Toby Perkins, MP for Chesterfield, has called for a debate in Parliament to discuss the job losses and potential effect on government contracts delivered by CSC.
Potential job losses at Chesterfield firm to be debated in Parliament - Derbyshire Times
www.derbyshiretimes.co.uk › news › pot...
22 Feb 2017 - Chesterfield MP Toby Perkins has secured a debate in Parliament about potential job losses at a town firm. Computer Sciences Corporation (CSC) announced proposals to axe a total of ...

Anonymous said...

Some the links from the previous comment are not complete.
Here's on
http://www.derbyshiretimes.co.uk/news/potential-job-losses-at-chesterfield-firm-to-be-debated-in-parliament-1-8403388

Anonymous said...

Here's another
http://www.tobyperkins.org.uk/2017/02/chesterfield-mp-calls-for-parliamentary-debate-on-csc-job-losses/

Anonymous said...

... and in the meantime HPE made a new company called Pointnext. Guess what they do?

https://www.hpe.com/us/en/newsroom/news-archive/featured-article/2017/03/HPE-Pointnext-Services-to-Accelerate-Your-Digital-Transformation.html

Anonymous said...

... and how long can it be before its staff are dubbed "Pointnexters", an obvious (except, perhaps, to a brand consultant), yet simple corruption of "Poindexter"?

www.urbandictionary.com/define.php?term=poindexter
Top Definition. poindexter. one who looks and acts like a nerd but does not possess the super-natural intelligence of a nerd."

pointnexter. a poindexter, who also can't spell.

Anonymous said...

> To be fair to Martin Healiss and Justin Fallon, they do push back against corporate, but
> as the informed know, that will only end up one way if you push too hard. It's not their
> fault. They work in a dictatorship the same as the redt of us that are still there taking
> our pieces of silver!

Havent we all just been subjected to the annual Ethics training? Werent we all told that the company doesnt tolerate workplace bullying and intimidation? "CSC will not threaten, intimidate, coerce, harass, discriminate against, or take any other retaliatory action against any individual or other person"

If they're being forced to do things they know are wrong, maybe they should grow a pair and report the dictator for abuses of his own ethics policies.

Anonymous said...

Interestingly, as someone else pointed out, some of the world maps visible in the ethics training had removed the UK entirely..

Anonymous said...

a word to the ethic and compliance thing ...

"Must god follow the 10 commandments?"

How many gods do we have?

Anonymous said...

Now that the non-compete agreement between CSC and CSRA has been relaxed, it'll be interesting to see if CSC re-enters the government contract arena. I'd find it hard to not think that it would be unavoidable, particularly in light of Lawrie's declaration that 'all options are on the table.' This can't be good news for CSRA and I don't think you can ignore that government contracts have been the bread and butter for HPE, soon to be grafted to CSC.

Anonymous said...

If Mikey has put all his stock options on the table, he'd better check its got reinforced legs and its on the ground floor

Anonymous said...

It appears that in the UK the legal entity of CSC Computer Sciences UK Ltd will be kept alive so allow them to continue with reductions post-merger. Not good news for the UK staff left clinging to the wreckage.

Anonymous said...

How is it that none of CSC's major investors or connected with the SEC has yet figured out that CSC is simply a giant Ponzi scheme? The fundamental business has been failing since Lawrie took over, revenues shrinking and customers and staff leaving in droves. CSC is being sued by many of its major clients for delivery failings and breaches of contractual obligations but the guy in charge spins 'non US GAAP and hides the realities! It's all a complete sham and the coporate governance structur is the thing that lets himhet away with misleading the markets.

Anonymous said...

https://en.wikipedia.org/wiki/Greater_fool_theory

Anonymous said...

Lawrie has taught everyone that investors will reward any company that treats employees like dung. The more he squeezes people's necks the better for the stock price to rise

Anonymous said...

Mikey must have shares in McKinsey, the amount of CSC money he throws their way.

Anonymous said...

Talk is swirling that NYS government will soon issue an RFP for an Integrated Eligibility program, which is intended to be a common platform through which public health programs can operate. Recently the non-compete agreement between CSC and CSRA was relaxed. Health contracts, particularly State, were bread and butter resources for HPE. Against this background and mindful that Lawrie underscored last year that 'all options are on the table,' I'd find it difficult to think that CSC/HPE would not throw its hat into the ring for what could be a lucrative contract. Any thoughts?