back to article Oh dear, DXC: Outsourcer loses two contracts

The Department for Work & Pensions has not renewed a pair of contracts it held with Frankenfirm DXC Technologies – a loss the outsourcing business was lamenting in its latest financial results. El Reg can reveal that the government department opted not to renew the legacy HP Hosting and Desktop agreements that were in place …

  1. Anonymous Coward
    Anonymous Coward

    Oh no!

    Quick, cut more front line and engineering staff!

    Customers are leaving us to in-house once again, we need to lose more customer facing staff to keep our profits up!

  2. Doctor Syntax Silver badge

    "strategy over the past five plus years has been to cut headcount"

    Yup, losing contracts. That'll do it.

    Learning how to do things yourself isn't a bad idea but when the would-be learners are DWP why do a feel unconvinced?

  3. Warm Braw Silver badge

    DWP is the home of legacy VME systems

    Given that VME now runs on Windows and Linux, is this such a big deal? According to Fujitsu, VME is "supporting over 150,000 staff online and handling over a billion transactions each year", so keeping it going might not be a bad idea.

  4. DontFeedTheTrolls

    I wonder if the contractors the Department of WORK and Pensions has engaged to complete the migrations are inside IR35?

    1. Anonymous Coward
      Anonymous Coward

      Dunno, but for the non-contracting staff, imagine being TUPE'd into the Civil Service?

      For people who were TUPE'd out of the CS it'll just be a case of coming home, and joining in a rousing chorus of the Civil Service anthem. For anybody whose experience is only from the commercial sector, it's going to be like being attacked by a thousand hamsters, albeit probably one of the hamsters will bring them a better pension than DXC were offering.

  5. Anonymous Coward
    Anonymous Coward

    Probably a relief to the management.

    As I recall, after the 2016 rounds of workforce reduction many departments didn't have the staff left to service their existing contracts.

    Which brings into question how you can become "redundant" when the work is still there to be done, and there is no one else to do it?

    Anonymous because, you know, out but still involved...

    1. Anonymous Coward
      Anonymous Coward

      the old switcheroo

      "how you can become "redundant" when the work is still there to be done, and there is no one else to do it?"

      When your employer doesn't actually want to deliver the service that the client is paying for?

      A great way to improve earnings per share, charge money, don't deliver.

      Seriously, according to the Employment Rights Act 1996, an employee is dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to the fact that:

      the employer ceases to carry on the business in which the employee was employed;

      the employer ceases to carry on that business in the place where the employee was employed;

      the needs of the business for employees to carry out work of a particular kind cease or diminish; or

      the needs of the business for employees to carry out work of a particular kind in the place where the employee was employed cease or diminish.

      I'd love someone to actually test that legally because sure as hell most of the people made redundant by CSC/HPE/DXC in the UK are not falling under those definitions in recent years. Its rarely end of a skill set, rarely end of a contract, not even offshore/rightshore just "we had to get rid of one of you" followed by "you will all pick up Fred's work now he is gone"

      1. Anonymous Coward
        Anonymous Coward

        Re: the old switcheroo

        DXC would argue that the redundancies are covered by "the needs of the business for employees to carry out work of a particular kind cease or DIMINISH" (my bold).

    2. Anonymous Coward
      Anonymous Coward

      Redundant ser-mundant

      I know one DXC manager working who has applied for VR in this latest round, the position is still very much needed, however as he has password from one account to another his role is not one of the 'approved' role names, such as account manager, service centre manager etc.

      They can make their position redundant as the role actually doesn't exist in the current list of DXC friendly role names, they can then replace him with a lower cost worker with a correct title.

      Funnily enough, given the grief his role title creates during annual appraisals, it has be seen as too much grief and cost to change his official role title as per his contract for them to do so.

      AC as although not DXC, my name associates me with a DXC contract, no one wants that.

      1. Anonymous Coward
        Anonymous Coward

        Re: Redundant ser-mundant

        They don’t normally replace with lower cost person you are more likely to end up with more expensive person (or people) in another office.

        With the company's pure overhead ADUs making all the decisions and passing the increased costs delivery side the business is doomed. Typical cost saving measures include.

        1) Make a cheap killed member of staff redundant and replace with unskilled contractor and twice the cost

        2) Take a person that does several roles say that those roles can’t be done at that location; make them redundant and tell the delivery side to employ two contractors at other locations. Over course you are not allowed in interview the contractors just in case you find one that can do the job.

        There is also the constant demand to increase margins on top of the increased costs caused by the ADU's policies. Delivery becomes impossible.

        Ever higher costs and poor delivery, in housing is a no brainer.

  6. Anonymous Coward
    Anonymous Coward

    The AWS line is complete bollocks. There's an enthusiastic interest in AWS but no serious deployments yet. DWP handle too much sensitive info for that to be palatable yet.

    DXC losing contracts isn't news. We all know they've gone down the pan. What would be more interesting to me is the interplay between "in sourcing" and the setup of sneaky in house pseudo-private companies like "DWP Digital". How much of the cash is being shuffled over to these opaque entities who are both exempt from usual civil service regulations and not subject to competition regs?

    1. Anonymous Coward
      Anonymous Coward


      Is that more or less sensitive than NHS data? Which is about to head to Azure...

      1. Anonymous Coward
        Anonymous Coward

        Re: Sensitive?

        Substantially more.

      2. Anonymous Coward
        Anonymous Coward

        Re: Sensitive?

        Or HMRC? Home Office? MoJ?

  7. Anonymous Coward
    Anonymous Coward

    Another one bites the dust...

    Yet another major revenue earner for DXC in the UK quietly shuffles off and the leadership reaction is to no doubt cull a load more jobs.

    Time to invest in solution and big deal sales people (are there any good ones left at DXC?). But that of course would require shareholders giving up a tiny amount of their return rather than shareholders just taking taking taking. The ITO market is growing in the UK, yet DXC aren't even at the table anymore - they squabble around on the floor hoovering crumbs.

    Sales & Leadership - DXC need to look those words up in a dictionary.

    1. David 55

      Re: Another one bites the dust...

      There is no real solution. IT outsourcing may be growing, but with its massive overhead, DXC cannot deliver a competitive solution for any but a handful of cases.

      Then there is a brain drain of quality employees rushing to get out of the sinking ship...

  8. ForthIsNotDead

    "The DWP decided to in-source," one insider told us.

    Good look finding contractors to work at the DWP!

    1. Steve Davies 3 Silver badge

      Re: Good look finding contractors to work at the DWP!

      Indeed especially with HMRC's (mis)interpretation of IR-35.

      As for DXC.... Time for it to close down. The bean counters have done more than enough to destroy it.

      Who would want to work for them knowing that they could be for the chop every day?

    2. Anonymous Coward
      Anonymous Coward

      Re: "The DWP decided to in-source," one insider told us.

      "Good look finding contractors to work at the DWP!"

      Half of the people working at DWP Digital are former HPE/CSC staff anyway!

      1. Miss Lincolnshire

        Re: "The DWP decided to in-source," one insider told us.

        Only the ones not keen enough to get way from that madhouse altogether.

        Commercial, in house IT Contracting is much more rewarding. It's almost as though they think IT is integral to the business rather than an end in itself.

  9. Anonymous Coward
    Anonymous Coward


    Now that the government agencies are moving more and more services to AWS, will they also be putting effort into encouraging Amazon to pay their taxes?

    1. Anonymous Coward
      Anonymous Coward

      Re: AWS

      Doubt it. Did you see the Panorama investigation this week? Brit gov wanted to make Britland a tax haven. And they did.

  10. This post has been deleted by its author

  11. Arthur the cat Silver badge

    The DWP decided to in-source

    At least they didn't give it to Crapita.

    1. Anonymous Coward
      Anonymous Coward

      Re: The DWP decided to in-source

      To some extent they will have done. Central government are increasingly relying on semi-private GovCos like HMRC's "Revenue and Customs Digital Technology Services Ltd", or DWP's "DWP Digital Ltd". These companies are made up of three main groups of staff:

      - People reverse TUPEd back from suppliers

      - Niche systems integrators like EqualExperts

      - Freelance contractors

      This latter group have been shuffled over to the GovCos because it isolates the department from the IR35 risk, but they're principally delivered through framework agreements with Crapita and co, who handle timesheets and invoicing and suchlike.

      So yeah, plenty of the cash will be going over to Crapita, only now the staff and services they deliver will be wearing civil servant branding without any of the accountability or regulation.

  12. shawnfromnh

    Hasn't anyone learned that HP is crap and always go cheap, real cheap.

  13. Anonymous Coward
    Anonymous Coward

    Hard to believe

    A government department out sources 1000 people to DXC with an expectation that they will continue to receive the same or better services. DXC promptly retrenches 60% of them and gets foreigners in India to answer phones in an nu-intelligble dialect, who are totally useless and have no idea.

    Government department is pissed off that it is paying millions of pounds for little to no service, and cancels outsourcing deal.

  14. Anonymous Coward
    Anonymous Coward

    I didn't realise that "in-source" was a thing now!

    1. Anonymous Coward
      Anonymous Coward

      If you work in IT it's a roughly 5-10 year cycle, insource, outsource, insource, outsource. The challenge for management is coming up with reasons for the change every time (or just using the same ones again as everyone's forgotten the last time).

  15. EnviableOne Silver badge

    Could this be why the Universal Credit is taking so long.....

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Biting the hand that feeds IT © 1998–2021