DXC Technology

Performance indicators

2019: Revenue and profit cuts

At the end of financial 2019, which ended on March 31, the company's revenue amounted to $20.75 billion against $21.73 billion a year earlier, and net profit - $1.26 billion against $1.78 billion a year earlier.

History

2023

Cartel participation in mining IT projects

On September 7, 2023, the Australian Competition and Consumer Commission (ACCC) announced that Swift Networks Pty Ltd (Swift) was fined AU $1.2 million (approximately $772 thousand at the exchange rate as of September 12, 2023) for participating in cartel activities. DXC Technology (owner of the Luxoft) was also named a member of the cartel.

Swift admitted to falsifying applications during tenders for the supply of technological infrastructure and services for three projects of the Pilbara mining village. These facilities are iron ore mines located in remote areas of Western Australia. As part of the project, it is necessary to ensure the supply of information systems, communication equipment and other solutions for providing Wi-Fi access and Internet connection in recreation rooms and public places at mining sites.

DXC Technology named as cartel member

The cartel, according to the case file, involved DXC Connect Pty Ltd and DXC Technology Australia Pty Ltd. Swift, the investigation found, agreed with the named companies that one of them, as part of a tender, would offer a higher price than the other. The essence of cartel collusion boils down to the fact that by falsifying applications, one of the participants is guaranteed to receive a contract. Cartel participants in the course of bidding can take turns becoming "winners" by agreeing on a way to submit tender applications. At the same time, some competitors may deliberately refuse to participate in the auction.

Bidding fraud is a serious violation of competition law. Such cartel actions could lead to higher prices for other businesses and, ultimately, for consumers, said ACCC Commissioner Lisa Carver[1]

Millions fine for cheating in financial statements

On March 14, 2023, the U.S. Securities and Exchange Commission (SEC) accused DXC Technology Company (the owner of Luxoft) of providing misleading information in its financial statements. In this regard, a large fine was imposed on the company.

The SEC filing states that DXC substantially overestimated non-GAAP net income (GAAP - generally accepted accounting principles). In particular, tens of millions of dollars in expenses were incorrectly classified as adjustments for transaction-related costs as well as resource-sharing and integration operations. DXC itself claims that the data published in the reports allows investors to "better understand the financial performance" of the company.

Luxoft owner to pay millions for cheating in financial Luxoft

It is alleged that DXC provided incorrect data for several reporting periods from 2018 to early 2020. SEC experts concluded that the company violated the anti-fraud provisions of the Securities Act of 1933 and the reporting requirements of federal securities laws. Without acknowledging or denying the SEC's findings, DXC agreed to pay a $8 million fine and stop publishing untrue financial data. In addition, DXC pledged to develop and implement the necessary policies for the formation and control of financial statements.

Organizations that choose to report non-GAAP financial measures must accurately describe these measures in their public filings. DXC's procedures and controls were found not to meet the task, and as a result, investors were repeatedly misled about the company's financial performance, said Mark Cave, deputy director of the SEC's enforcement division.[2]

2022

DXC Technology estimated the loss of annual revenue from leaving Russia

The American DXC Technology, which bought the developer in 2019, ON Luxoft calculated that leaving Russia it would cost it $140 million in annual revenue. Such data at the end of May was cited by DXC Technology CEO Mike Salvino during a conference call with top managers and analysts on the financial results for the 4th quarter of 2022, which ended for the company on March 31^[3]

In addition, the company estimated the costs associated with caring for personnel in Ukraine and Russia against the background of a military special operation at $50 million. This includes the cost of transferring the Russian part of the business to other locations and assistance in moving Ukrainian and Russian employees.

In particular, according to Mike Salvino, DXC Technology company helped many of its employees in Ukraine to the west of Ukraine, Poland and Romania. In addition, by the end of June, DXC Technology expects to complete the relocation of part of the staff from Russia.

DXC Technology will transfer projects that were carried out for international customers to teams in other countries "(photo - cloud7.news)"

The company did not name how many employees the company currently has in Russia. In a statement by DXC Technology about leaving the Russian market in March, it was claimed that about 4 thousand people worked in Russia^[4] But in April, Luxoft's Russian business was bought by IBS. In the annual report, DXC Technology notes that the sale of this business made it possible to save work for many employees who wished to stay in Russia^[5].

Moreover, according to the Unified State Register of Legal Entities, if the main Russian legal entity Luxoft - Luxoft Professional LLC - has already changed its owner in early May, then Integrity Solutions, which also belongs to Luxoft and is focused on supporting and implementing the cloud digital platform SberbankPlatform V, the owner remained the same - Swiss legal entity Luxoft. In 2021, Integrity Solutions had an average headcount of 480.

It follows from the annual report of DXC Technology that in addition to legal entities associated with Luxoft, its assets in Russia also include BTO Group. About 70 people worked there in 2021.

It also says that DXC Technology transfers international projects for which its Russian colleagues worked to its teams in other countries. She expects to complete this process before the end of the 2nd quarter of her fiscal year 2023, which ends on September 30, 2022 of the calendar year.

Withdrawal from the Russian market

On March 4, 2022, DXC Technology, which includes software developer Luxoft, announced its withdrawal from the Russian market amid the situation around Ukraine.

We no longer do business in Russia and decided to leave this market... We continue to support employees and strictly comply with all sanctions imposed on Russia, the DXC said in a statement.

Luxoft owner left the Russian market and did not say what would happen to 4 thousand employees

The company said that by the beginning of March 2022, it has about 4 thousand employees in Russia, "who receive support at such a difficult time." At the same time, the IT vendor did not specify what would become of this team - whether there would be layoffs, workers moving to other regional divisions, etc.

Now our number one priority is taking care of our colleagues in Ukraine. Our dedicated DXC team works around the clock to provide our colleagues and their families with shelter, financial and medical assistance, and support during the relocation... We will continue to assess the situation and, if necessary, will take new measures, using the strength of our global team to reduce the impact of the situation on our colleagues and DXC customers, the company said.

DXC plans to donate UAH 10 million to the Ukrainian Red Cross society, as well as provide direct financial assistance to its employees in Ukraine.

According to the CRN edition, by the end of March 2021, DXC had 11 offices in Russia, including in, and To Moscow St. Petersburg. Omsk They operate under the names Luxoft Professional, Integrity Solutions and other subsidiaries. DXC also has two holding companies (DXC Russia HoldCo B.V. and DXC Russia HoldCo II B.V.) registered in. In Holland Ukraine, DXC Technology has offices in, and Kiev To Odessa Dnipro.^[6]

2020: Veritas Capital Creates DXC Technology-Based Gainwell Technology

In mid-September 2020, private equity firm Veritas Capital acquired the medical business of DXC Technology (this group includes Luxoft) for $5 billion and announced that after the deal closes on October 1, a new company called Gainwell Technology will be created on its basis . Read more here.

2019

Virtual Clarity Digital Transformation Provider Purchase

In November 2019, DXC Technology, which had closed its takeover of Luxoft a few months earlier, announced the purchase of Virtual Clarity. Its participants did not disclose the cost of this transaction. Read more here.

Mike Salvino is the new CEO of DXC Technology

On September 11, 2019, DXC Technology, which is the owner of Luxoft, announced the resignation of the company's CEO and President Mike Laurie. He lost his place to former Accenture top manager Mike Salvino. Read more here.

Morgan Stanley: DXC Technology to buy in next 12 months

In early August 2019, Morgan Stanley unveiled a list of large IT companies that bank analysts believe will be "accurately bought" over the next 12 months. Among them is DXC Technology. Read more here.

EG A/S Purchase - Microsoft Dynamics 365 Integrator

In January 2019, DXC Technology announced the purchase of Danish company EG A/S, an integrator of Microsoft Dynamics 365. Read more here.

Purchase of Russian Luxoft for $2 billion

On January 7, 2019, DXC Technology announced the acquisition of Russian developer POLuxoft Holding to expand its portfolio of digital solutions for customers in the financial and automotive sectors. Read more here.

2017: Computer Sciences buys IT services division from HPE and transforms into DXC Technology

On April 3, 2017, Hewlett Packard Enterprise (HPE) announced the completion of a deal to separate the corporate IT services business and merge it with Computer Sciences Corp (CSC). The asset combination created a new company called DXC Technology.

HPE expects that the deal will bring the company about $13.5 billion after taxes. This amount will include a stake in DXC, dividend payments in favor of HPE and the transfer of part of the debts to DXC.

HPE logo on circles

Closing this deal leaves HPE with an absolutely transparent mission, directly related to the solutions that our customers and partners want the most, says HPE CEO Meg Whitman. - I am also particularly proud that the deal will generate approximately $13.5 billion in revenue for HPE and shareholders, nearly 60% more than originally reported last year.

Corporate IT services will no longer be considered in HPE operations. In this regard, the company lowered its forecast for the second quarter of fiscal 2017: if earlier the vendor expected losses of a maximum of 3 cents per share, then after the deal with CSC it began to predict cash losses of 3-7 cents per security.

HPE notes that the company will retain the Pointnext technical services division it created and will continue to invest in it. Pointnext provides consulting, professional, and business transformation services to clients.

In addition, HPE will maintain a close relationship with DXC, whose board of directors will include Meg Whitman.

On the day HPE announced the merger of its assets with CSC, the first of these companies declined 1%, reaching the smallest mark in the previous nine months - $17.57.^[7]

2016: HP Enterprise Services Purchase Announcement

On May 24, 2016, Hewlett-Packard Enterprise (HPE) announced the separation of the IT services business and its transfer to Computer Sciences. Through the move, HPE intends to focus on cloud services and other fast-growing destinations.

HPE is get rid of Enterprise Services, which specializes in consulting, outsourcing and system integration services. As a result of the merger of this business with Computer Sciences, a company worth $26 billion will appear, 50% of which will be owned by HPE shareholders.

2015: Separation from Computer Sciences of CSRA, a government order company

By November 2015, Computer Sciences does not have a representative office in Russia. Computer Sciences subcontracted technical support services for its clients in the Russian Federation and neighboring countries to iT back in 2007.

At the end of November 2015, Computer Sciences officially split into two companies after years of trying to sell this IT service provider.

According to The Wall Street Journal, on November 30, 2015, shares of the new public company CSRA Inc. (ticker CSRA) began trading on the New York Stock Exchange, to which the Computer Sciences business in the field of government orders and the previously acquired company SRA International. After the crushing, Computer Sciences focused on corporate clients.^[8]

The intention to separate government contracts from commercial Computer Sciences was announced in May 2015. The company bowed to pressure from activist shareholder Jana Partners, which urged the IT outsourcer to consider strategic options for further business development.

Computer Sciences split into two companies

After Computer Sciences agreed to the reorganization, Jana Partners began to reduce its equity stake in the company, and in November 2015 it was 4.1%. The sale of Computer Sciences shares in Jana Partners was attributed to "regular asset portfolio management activities." At the same time, the investor said that he fully supports the separation of the company.

The split of Computer Sciences was preceded by numerous rumors about the sale of the company, which circulated in the media for many years. After the company's state business has become independent, it will be easier to acquire competitors such as HCL Technologies, Atos or Cap Gemini, Bloomberg observers say.

Notes