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 …
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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.
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?
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.
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.
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.
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.
'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.
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.
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"
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.
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.
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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.
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.
"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.
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.
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.
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