CSC is going to go through another massive headcount reduction. That will allow some short term benefits but in the long run will cause great damage to the company's reputation and ability to serve the customers thereby positioning the company very poorly for the future. That may help the share price in the short term, but in the long term client secession and the inability to sign new or retain old customers will cause a strong downward pressure on both revenue and OI thereby crushing the share price unless CSC is acquired
Gary Hamel once famously said "You don't make a fat man thin by cutting off his leg" CSC has taken that saying to heart and unfortunately they tried to make the fat man thin by cutting off his head
CSC's new leader came in with the idea that savings were going to be easy and they were not, He is willing to do whatever it takes to make his short term financial goals even at the risk if heavily damaging hte company, very much like Dick Brown did at EDS.
I see a share price below 20 in the long term unless they are acquired or get a new CEO
100% agree. The CSC board selected another financial manager, we were expecting an engineer to run the company, not a chain saw. Cost cut is necessary, and it is relatively easy to do. There are many highly paid deadwoods inside CSC. These are the people need to go. There are about 2,600 of these people: 2,600 x $150,000 = $390M to $450M perm saving for real. This is about 60% of the CSC's true earning. Growth in revenue for CSC, at this point forward, is highly unlikely at best.
Your numbers are light they have whole divisions and accounts that don't do crap. A little disappointed to see good people giving up and the deadwood still holding on. The sad part is as the stock goes up the #$%$ holes take the credit and more bonus money out of the company.
the only problem is there - is that they are getting rid of the wrong people - the dead wood are staying as the Voluntary Redundancy is being taken up by good people! So your savings prediction is correct and possibly a little conservative but what do they do when they look at the dross that is left behind!
Deadwood. Now that is a phrase the shills on the old Aon board used whenever whenever a RIF happens, seems only those DEADWOOD people, which somehow exist and have existed for a long long time, are suddenly DISCOVERED and brought to book. AH HA, CAN THEM ALL, NOW OUR HIRING PRACTICES ARE SMART!!!
Same old lame excuse for the same game of firing American workers and hiring Indian replacements.
I voluntarily departed CSC less than a year ago after way more than a decade of service...saw this whole thing coming. The fact of the matter is that the structure of CSC has bred the typical big company culture of middle managers stiffling the true good idea people. "Rocking the boat" in ANY fashion with ideas was met with demotion or some other type of silencing. There are managers who were allowed to keep positions despite corroborated instances of unethical behavior. To survive, the cogs need to be removed or CSC faces potential things like hostile takeover, class action lawsuits, etc. People I still know there are saying that while some of the big problem people were given notice, the powers that be need to go maybe two levels lower. Why do you think CSC has fallen significantly in "innovation" standings? Maybe someone got smart at the top levels!
Looks pretty classical, isn'tit? Slash and burn; jack it up to the plate for a PEI takeover, then pump and dump. Good Old Lawrie is a hatchet man, a damned good one, with the golden parachute ready.
Pile of Crap!