Mike Salvino has taken over President and CEO of DXC Technology, replacing former leader Mike Lawrie.
Lawrie had served as Chairman, President and CEO of B2B IT services company DXC since its formation from the merger of CSC and HPE Enterprise Services in 2017. He will continue as Chairman until December 31, but has already been replaced as President and CEO by Salvino.
“Mike Salvino is the perfect choice to lead DXC into its next phase of growth,” said Lawrie. “He is a proven leader with a strong track record of successfully running businesses, forging trusted client relationships, and creating an environment to grow and develop talent.”
Salvino joined the board of DXC Technology in May, and most recently served as a managing director at Carrick Capital Partners, a technology-focused private equity firm, where security was among his specialisms. Prior to that, he spent more than 22 years at Accenture, culminating in a seven-year stint as CEO of Accenture Operations.
“DXC has an enviable client portfolio, deep industry partnerships and a talented global team. I am looking forward to leveraging these strengths and my proven operational playbook to accelerate the execution of our growth strategy.”Mike Salvino, President and CEO, DXC Technology
He has his work cut out for him. The various mergers and transformations undergone by the entity formerly known as Computer Sciences Corporation were intended to allow it to remain competitive with lower-cost offshore outsourcing providers, and overall, succeeded in this effort: DXC Technology remains a key partner for many of the Fortune 500.
Both CSC and HPE have a history of cost-cutting in the employee department in particular, and DXC has lived up to their legacy – office closures and significant layoffs were planned from the start as a way of achieving the planned cost reductions of $1.6 billion, and since 2017, waves of redundancies have continued consistently.
Predictably, the extended cost-cutting measures have not inspired warm fuzzy feelings in DXC Technology’s employees, who have given it a rating of 2.8 stars on Glassdoor. Only 36% say they would recommend it to a friend, with a cursory glance through reviews showing that workforce reduction, lack of bonuses/raises, and ‘apathy’ regarding staff happiness are frequently cited, even in several of the neutral or positive reviews.
And is the resentment worth it? DXC’s earnings presentation for Q4 FY2019 showed full year revenues down by almost $1 billion compared to FY2018, and results for Q1 FY2020 are similarly disappointing, showing revenue of $4.89 billion compared with $5.28 billion in Q1 FY2019.
DXC is also facing legal troubles, including a class-action lawsuit alleging that DXC ‘among other things, failed to disclose that the Company were heavily focused on using cost-cutting efforts and layoffs to inflate short-term financial metrics and that these efforts substantially impaired the Company’s ability to deliver contractually required services to clients’.
Still, Salvino seems optimistic that he may be able to turn things around for DXC.
“DXC has an enviable client portfolio, deep industry partnerships and a talented global team,” the press release quotes him as saying. “I am looking forward to leveraging these strengths and my proven operational playbook to accelerate the execution of our growth strategy.”
He elaborated a little on what this playbook entails on a conference call with investors. One aspect he particularly emphasised was the importance of investing in employees, including personal development and career progression, and told investors “we will make sure we provide an environment where we acknowledge, recognise and reward our people”.
Other insights revealed during the call included further emphasis on the growing importance of digital transformation and cloud migration services to DXC’s business, Salvino’s intention to focus on existing clients initially before penetrating “as many new clients as we can”, and the unhelpfulness of the phrase “Mike, this question’s for you” on a call with multiple Mikes.