Facing declining revenue but with a renewed commitment to reverse that slide, DXC Technology has brought on a new slate of executives to “seize the market and build a strong financial foundation” more than a year after it made significant layoffs.
Mike Salvino, president and CEO of DXC Technology, said in a first-quarter earnings call Wednesday that 75 percent of the company’s leadership team is new with about 50 percent of its vice presidents coming on board within the last 22 months. Salvino took over DXC as CEO in September 2019.
“What the team is finding is that the new DXC story is resonating in the market and new hires are wanting to join DXC, because they see the opportunity to progress their careers with a company that‘s on the right trajectory,” he said on the call.
The company reported first-quarter revenue of $4.14 billion, slightly higher than the Zacks consensus estimate of $4.11 billion but still down 8 percent from the same quarter a year ago.
DXC shares fell more than 8 percent to $38.72 on Thursday in the US.
The company has been under financial pressure and, in one significant move, planned to cut about 4,500 jobs in May 2020 and “simplify management layers” in an effort to respond quicker to customer needs.
CRN US reached out to DXC for additional comment.
In what Salvino called a “transformation journey” to build a “strong financial foundation,” DXC is moving into a “stabilization phase” that will continue to increase employee engagement as well as stabilize year-on-year organic revenue, expand EBIT margins, deliver a 1.0 or higher book-to-bill that increases cash flow and improves earnings power.
But it all starts with good talent, the CEO said.
“We are executing a people-first strategy, attracting and retaining talent is fundamental to enable our growth,” said Salvino during the earnings call. “Our refreshed leadership team has deep industry experience and is delivering. What the team is finding is that the new DXC story is resonating in the market and new hires are wanting to join DXC, because they see the opportunity to progress their careers with a company that‘s on the right trajectory.”
One of DXC’s most recent hires, Salvino noted, was Brenda Tsai as chief marketing and communications officer where she will lead all global marketing and communication functions. Salvino called Tsai a strategic results-oriented leader with deep marketing experience.
Tsai has more than 25 years of experience and has held senior roles at BNY Mellon, GE and P&G, according to a DXC news release.
DXC is also investing in its current employees through incentives, Salvino noted. During its first quarter, the billion-dollar solution provider rewarded about 45,000 employees with bonuses with plans to roll out merit increases to about 77,000 employees in the second quarter.
“In addition to these investments, we are doing a great job of taking care of our colleagues and their families during the pandemic,” said Salvino during the conference call. “This focus on our colleagues is unique and builds trust with them, increases employee engagement, allows us to compete for talent and enables us to deliver for our customers. Focus on our customers is the second step of our transformation journey. Our investment in our customers is the primary driver of revenue stabilization.”
DXC was flirting with a potential deal to be acquired by French solution provider, Atos, earlier this year but plans were squashed after the DXC board of directors found that “the offer was determined to be inadequate and lacking certainty in light of the value the board believes DXC can create on a standalone basis by executing our transformation journey,” CRN previously reported.
Salvino said attracting and retaining talent “wins in the market.”
Pushing a people-first strategy is what differentiates DXC in the industry, he said, adding that “talent follows talent.”
“We are seeing competition for analytical skills, for application skills and for cloud skills just like everybody else, but we are definitely getting our fair share of those to support our clients,” he said. “I still feel very confident looking at our talent across the board that we will compete very well in this space for talent.”