Thread regarding CSC layoffs

The merge with HPE will probably be the biggest change CSC has experienced in its history

Over the past few days, there have been some interesting comments in the Cassandra blog about the direction CSC is taking.

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One school of thought is that Mike Lawrie has taken the right steps to respond to fast changing market conditions, and the changing expectations of analysts and investors. In doing so, he has not only saved a company which came close to bankruptcy just 4 years ago, but has revived it and given it a future via the planned merger with HP Enterprise Services. This view says that Cassandra’s skeptical view of CSC’s future is all wrong.

Another school of thought is that CSC was being kept alive, and its share price maintained, by intelligent financial engineering and by hollowing out the company’s intrinsic value in the quest for quarterly Earnings Per Share. In this view of the world, at some point the financial markets and the company’s clients would figure out that CSC is more style and window-dressing than substance and when that day comes, CSC share price will come down to earth with a jolt. Cassandra’s skeptical view of CSC was broadly in line with this scenario.

In a certain way, it does not matter any more whose view is more accurate. The merger with HP Enterprise Services will impact CSC’s future massively, the big question is “how”. We all know that such deals are usually announced as “mergers of equals”, but that is just marketing spin. After the merger has happened, we will find out which company has really taken over and subsumed the other. The fact that Mike Lawrie has been announced as CEO of the new company is not necessarily good news for CSC employees. Lawrie is after all the best placed person to “vaporize” CSC into HPE if that is the plan.

We at Cassandra are not hopeless nostalgics yearning for the time when CSC was a successful, highly regarded and a great company to work with or for. The only thing we are really nostalgic about are the days when CSC employees were treated with respect by the management. But the market has changed, the customer needs have changed and the industry has changed forever. Elvis is dead and no amount of reported Elvis sightings will bring him back. So it is with CSC.

The merge with HPE will probably be the biggest change CSC has experienced in its history and nothing will bring CSC back to what it was.

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HP is dumping it's unprofitable services division onto CSC. CSC won't be able to turn it around. They are currently have problems supporting their existing client base. Both divisions are destine for failure. Maybe that is what HP's goal is, to write off it's unprofitable Enterprise Services.

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