DXC hit with sueball over layoff steamroller's share price dip
El Reg namechecked as lawyers claim investors 'misled'
El Reg's revelations of layoffs at DXC Technologies over the last year were mentioned as US lawyers attempt to launch a class-action lawsuit against the slash-happy tech biz.
US law firm Robbins Geller has been looking for a lead plaintiff in a class-action suit it wants to bring against DXC, which was formed out of a merger between CSC and HP Enterprise's former enterprise services business.
In a 27 December filing in the Eastern District of Virginia, the lawyers alleged that DXC and its top execs "failed to disclose that the Company had changed or planned to change the operations of its sales teams", having replaced some of its specialist salesmen with jacks-of-all-trades.
The complaint pointed to revelations in an earnings call following the release of the firm's Q2 '19 results on 6 November last year, where CEO Mike Lawrie spoke of a move to a more "general" sales model in the US for two quarters, following which a move was made back to the specialist model.
Back in October we exclusively revealed that Karan Puri, chief of DXC's Americas operation, had been invited to walk the plank after spending just 10 months working for the company. Insiders told us the reason for his exit was the US sales operation missing revenue targets.
Our exclusive revelation of this prompted a 19 per cent crash in the company's share price as investors started asking what was going on. Like most of the tech industry, DXC has struggled with the rise of AWS and other cloud vendors, who are busily eating the lunches of traditional IT outsourcers.
Robbins Geller alleged in a US court filing against DXC (PDF, 34 pages) that its shares "traded at artificially inflated prices" prior to Puri's departure becoming public knowledge "and the individual defendants were able to sell a total of 215,549 shares of their DXC stock for proceeds of more than $19.8m at artificially inflated prices".
We have asked DXC for comment and will update this article if we hear back.
Had investors been reading The Register, they'd have known that 2018 was DXC's Year of the Layoff (part 2), with execs and ordinary working folk being dropped like warm dog turds. "Individual consultations" on redundancies are due to begin in just a fortnight, according to DXC UKI veep Peter Hands, who passed the cheery news around the firm's Deliver division in late November.
Having begun its existence in April 2017 with 170,000 staff worldwide (PDF), DXC has lost a remarkable 40,000 people from its headcount since then as execs tried to cut the business's costs. By March 2018 (page 7), the firm had just 150,000 staffers. The firm's own website currently says it employs 130,000. Just 10 weeks ago that page said 134,000. ®