DXC squeezes suppliers for extra margin, issues ultimatum

The procurement team at DXC Technologies might consider giving courses on how not to win friends or influence people after sending suppliers an ultimatum: cough better financial terms or else. In a global initiative to bulk out margins, the outsourcing firm wrote to its traders warning them that if they wanted to remain on the …

[Anonymous Coward]

I'm nearly speechless, there are no bounds this bunch of arrogant shysters won't go to,

[Anonymous Coward]

Sounds like the beancounters at IBM made themselves redundant and have moved to HP/DXC to continue the same failed philosophy there. Have they cut out coffee and milk and stationary too, like IBM did?

[Anonymous Coward]

Slippery slope

I don't remember HP being such a toxic company when I left 3 years ago; so is this the CSC influence or has the merger bred some sort of suicidal monster?

[Anonymous Coward]

Re: Slippery slope

HPE ES was getting worse by the quarter. Lawrie appears to have decided to go all out.

[sanmigueelbeer]

Re: Slippery slope

I don't remember HP being such a toxic company when I left X years ago

I did. HP said that we need to give up a percentage of our pay for a chance of not getting "forced out" (after swallowing up EDS).

I left and soon found out the people who were forced to leave had the same chances of those people who didn't offer a pay cut.

It was a "numbers" game to make the books look good.

[Anonymous Coward]

Not exactly unexpected is it? I'm told one of the first actions taken was to extend the period between collecting from customers before paying suppliers.

The only thing that shocked me in the article was the outrageous assertion that the bastard child of CSC and HPE ES supplies stationery to staff. When I had an account the only way to get a stationery order through was to get a member of the outsourced first line support team to buy it and then charge it back hidden within the monthly charges. Most staff supply their own pens and pads or just empty the printers.

Contractors will be getting a similar rate cut demand no doubt. Rate cuts and imposed furloughs are, after all, quite the norm. Next round of redundancies underway also, I already know of three that have seen the exit sign light up. Pensions are also to be hit after “consultation”.

The behaviour of a company with a long term future?

[Anonymous Coward]

Copying another "rule" from IBM's playbook. Push out payments to suppliers to 90 days, and insist on 30 day settlement terms from customers.

Won't be long before customers wake up and in-source their IT, and dump these greed is good American companies who continue to fail to deliver.

[Erik4872]

How NOT to Win Friends and Influence People

That's pretty arrogant, but I've seen that happen to friends of mine who work contract jobs in finance. One day the bank will just say "we're cutting rates by 10% and/or changing your contract terms effective immediately. Agree by 5 PM or pack your stuff and go."

Now, contracting is one of those things where you know you never have a stable job but the pay can make up for it. Purchasing OTOH...how many suppliers do you think rely on large corporations overpaying for items because of some contract negotiated years back? I'm betting it's a lot. DXC may just be another rebranding of HP Services, EDS and CSC, but it sounds like they're trying for a margin squeeze right out of the gate so they can "look tough" to their supply chain.

It'll be interesting to see what this company does. You could argue that with the cloudy world upon us, companies will become even less aware of what happens inside the IT magic box, but I guess they have to balance that with the fact that most companies have been around the block with IT outsourcing once or twice before. Hopefully this means they are less susceptible to the sales tactics that allowed EDS/CSC to charge rates that allowed suppliers to overcharge for toilet paper...doubt it though.

[Sir Runcible Spoon]

Re: How NOT to Win Friends and Influence People

we're cutting rates by 10% and/or changing your contract terms effective immediately. Agree by 5 PM or pack your stuff and go

Whilst no-one is indispensable, there are definitely people who make a difference to the bottom line of the company. Applying this kind of approach across the board is very dangerous as it creates a trigger point.

A trigger point for a contractor is pretty much the same as a renewal situation - you are either happy with the terms or you bugger off somewhere else. If you have in-demand skills then something like that is likely to raise warning flags about future behavior.

A company did try that with me once, 10% pay cut for all contractors etc. I used the opportunity to negotiate a 10% rise in my day rate :)

Another time a company decided to amend all the notice periods for all contracts. As this was just before Christmas it came as a bit of a shock to see a contract termination notice in my inbox. Needless to say they were surprised when they presented the updated contract and I told them they had the rate wrong :) That one resulted in a 12.5% increase.

[Anonymous Coward]

Not surprising

As a DXC employee I can only say I just want this nightmare to end.

Been looking around for another job, hopefully will be working for a company that actually gives a damn about their employees soon but haven't had any luck yet. The management in this stupid company are beyond awful. Nick Wilson, if you're reading this I'd like nothing better than to ram my contract right into your mouth and force you to eat it. You are a charlatan, a fraud and a shyster.

Mind you, working in Costa Coffee would be better than the nightmare I have to endure every day right now.

[Erik4872]

Re: Not surprising

That's the problem with IT services companies in general. They have to make margin on their outsourcing deals and have lots of levers to pull in order to do it. I work for a decent service provider, and even here there's a constant drive to squeeze and squeeze more. The main reason I actually like working for service providers is that you get exposed to a lot of things while not having to endure 100 hour weeks at a software company or a soul-crushing internal IT job at a company that doesn't care about IT.

If you manage to get to the point where you're something of an expert at what you do, keeping that spot has become harder since management feels they can replace you with 100 identical resources in a cheaper part of the world. The sweet spot for me seems to be finding those rare companies that will grudgingly pay for someone who can demonstrate better results...those are getting harder to find but they're out there. Body shops like DXC will never value talent...and forget it if you're doing anything considered a commodity skillset. Even if it takes the offshore guys 20x longer to do something, they're still cheaper, the customer won't know the difference and you'll never compete with that.

[HmmmYes]

Re: Not surprising

'Even if it takes the offshore guys 20x longer to do something, they're still cheaper,'

Only if they are less than 20x as expensive.

In reality, when you add the extra management overhead, the extra time taken, etc youll find that the Indian outourcer is more expensive. Been there, done the maths, walked away.

[Sir Runcible Spoon]

Re: Not surprising

Please tell me you didn't post that from a company machine/network?

[Anonymous Coward]

Re: Not surprising

No, I typed it at home via a VPN that I trust.

I'd say it to his face if he had the guts to come to our office. But like most cowards he hides behind his stupid emails full of lies.

[Anonymous Coward]

Re: Not surprising

As a HPe, now DXC contractor, I wonder every day why I took the job with them. They seem to have no bleeping clue what they're doing, other than waste tax payer money.

[Miss Lincolnshire]

Re: Not surprising

Wilson's a clown. In his previous incarnation under HP he told a Town Hall in Telford that the redundancies that had just been announced (bear in mind they've been going on for almost 10 years) weren't aggressive enough and that he'd have gone for double the number.

Zero self awareness is not a soft skill.

[Anonymous Coward]

Are you in Erskine by any chance?

Do tell.

[Anonymous Coward]

Management will endeavour to achieve this through a mixture of real estate consolidation, redundancies, offshoring jobs and supply chain efficiencies, including getting increased support from “strategic partners,” the business revealed in its Investor Day document.

Which translates to "anyone who has anything to do with the company will be expected to bend over and take one"

[Anonymous Coward]

Stationery

Stationery? That's a laugh!

[Anonymous Coward]

DXC

DXC refused to comment - no change there then. It would only be bullshit if they did.

[Anonymous Coward]

Interesting. I have a couple of contractors from DXC nee HP on the books. The contract is due for renewal next month. We will have a discussion about a 15% cut in their rates. Now sadly this will simply mean that DXC will try to screw the contractors over and force them to take the cut in rates to maintain the DXC margin.

I wonder what I can....? Suggestions welcomed.

[Anonymous Coward]

Suggestions welcomed.

How about not working with DXC at all?

They'll soon have no on-shore staff other salesmen and senior managers. And I presume the sales people are now getting worried that DXC's next move to reduce costs will be to "do an Oracle".

[Miss Lincolnshire]

Approach them directly. Pay them a better rate than they get and lower one than you are paying HP.

Everyone's a winner

[Anonymous Coward]

Drasrtic

Fuck me things must be bad if they are trying save a few bob on bog rolls, kitchen towels, and pens, it's laughable. Wonder when the excellent free coffee will go?

[Anonymous Coward]

Re: Drasrtic

F*** me, you have excellent coffee?

Tell me where this nirvana is in DXC and I will request a transfer.

We have muck that takes the glaze off of those DXC mugs.

[Anonymous Coward]

Re: Drasrtic

It's called working from home. Excellent coffee, decent lunches, comfy desk and chair and a decent size monitor, plus all the comforts of home. Given the number of temporary managers I've had in the last eight months hopefully they'll soon forget I exist and somebody I don't know will keep signing off my time.

[Anonymous Coward]

Nirvana - more like Dukkha. And the coffee is probably the same Ersatz crap that you drink, but it won't last much longer. :)

[Anonymous Coward]

Reading this ...

... as I try to eat dinner in my hotel for under £20.

DXC is charging me to the client at a discounted rate of over 600/day.

I am paid 20% less in real terms than when I joined.

Personal circumstances previously presented escape but I'm starting to plan.

[Fenton]

SAD

Ex CSC myself

I find it very sad what has become of the one big outsourcing companies.

Companies with hundreds of technical/functional consultants and analysts and

Programmers. They could have come up with innovative SaaS solutions new ways

of doing business, but they forgot their DNA. Instead the good left sometimes ending

up in start ups.

Alas the accountants and restructuring managers are in charge.

[Anonymous Coward]

We've all known that companies have done this for years, but it's good to one admit that they offshore jobs to keep or improve margins. Now, it's well past time to make it illegal. These companies are bankrupting the countries and societies that built them completely due their corruption of the political system and those, many, politicians who've been bought and often cheaply, the fools.

[Anonymous Coward]

That's globalisation mate.

Where do you think British manufacturing went or hadn't you noticed?

I don't think anyone but you has just woken up to the fact that besides tax dodging coffee shops and chicken shops with poor hygiene standards, there is fuck all left in the UK.

[HmmmYes]

Mass employment in UK manufacturing has gone away.

UK manufacturing has not. Its just employs less people and produces high value products.

The days of an Easter (as was) leaving school on Friday and walking into a metal bashing job on Monday are long gone.

[Anonymous Coward]

I noticed it a long time ago, 1980s, and have been speaking against it since then. It does worry me that I don't see more people doing the same. Have people simply given up? It's corrupt Turtles from the top down.

[John H Woods]

"Where do you think British manufacturing went or hadn't you noticed?"

I wish people wouldn't say this, Britsh manufacturing has a hard enough time without the constant refrain that we don't have much. The U.K. is a pretty major global manufacturer: bottom of the top 10 in the world, perhaps, but still top 10.

[Anonymous Coward]

I'm from a BigFour background and worked on the separation of HP to HPE, then the merger of HPE and CSC.

These are by far the most badly mismanaged companies I've ever had the burden of helping. It would appear all the very high quality personnel left, with 50% of the remainder being reasonably good quality staff - nice people too.

The managers were universally atrocious.

One gentlemen who I encountered would wear a puffy skiing jacket around the Erskine campus and dress like Sid Vicious. It was only upon speaking to him I was made aware he was a manager. I smirked at hearing his background, with him being unable to competently answer all basic questions put to him. I cannot understand why the long term management remain working there. I can only imagine they have a remuneration base package of £150k+ to tolerate the extremely unusual dictat hierarchy.

They're hiring many buffoon contractors who don't know arse from elbow.

I spoke to five contractors in the Erskine area - three were in identical roles. Rates varied from £250 to £500 per day. Does HR possess no function there?

If you are at DXC now I strongly urge you to leave. HPE was tolerable for the remuneration, but you are worth far more than DXC suggest you are.

[Anonymous Coward]

They aren't managers though - nobody has any power devolved to them.

That's the problem, the CEO is a mad dictator controlling everything down to the smallest level. Well, obviously he can't have the time to do that, but he insists that in the absence of his genius that nobody else is allowed to do anything.