DXC Technology has unveiled plans to merge operations in Asia with Australia and New Zealand, forming a combined business entity across Asia Pacific.
The new-look regional organisation will be led by Seelan Nayagam, who has held trans-Tasman responsibilities since 2014. Meanwhile, Koushik Radhakrishnan - previous leader of Asia - will assume a US-based role driving global strategic transformation at the technology provider.
According to DXC, the move is motivated by a desire to leverage the “strengths and scale” of both employees and technology capabilities across the region, in a bid to better meet customer demand.
“Our focus is on helping our customers on their transformation journey as they unlock value across DXC’s enterprise technology stack,” a statement from DXC read. “This realignment will help ensure our people are better globally connected to each other and our customers, compete and simplify the way we operate.”
In late May, it was revealed that weakening customer relationships and “suboptimal” customer delivery were some of the factors behind a substantial revenue run-off that contributed to a loss of roughly US$1 billion in revenue for DXC in FY20.
The global systems integrator’s (GSI) CEO and president Mike Salvino told shareholders on 28 May that the company expected roughly 4,500 employees, or around 3.5 per cent of its global workforce, to be affected in a major cost-cutting initiative the company is undertaking in a bid to stem its losses.
“DXC's main fundamental challenge has been revenue run-off from existing contracts,” Salvino said during an earnings call on 28 May. “With everything we've been doing for our existing customers, we should be able to stem future revenue run-off.
“I say this because over the last [seven] months, we've done a lot of work to secure our customers, improve delivery and study our customers' IT states,” he said.
Salvino was candid during the call, putting the blame for a substantial drop in revenue not on external influences or market forces, but rather upon the company itself. And he didn’t pull any punches when it came to the company’s outlook for FY21, which painted a grim picture.
“Here's the key finding from all this work,” he said. “Our revenue run-off was not caused by cloud trends, prompting customers to move away from DXC. Instead, this run-off was due to suboptimal customer delivery and weakening customer relationships.
“As a result, we lost roughly [US]$1 billion of revenue in FY20 and expect to lose a similar amount in FY21 from price-downs and terminations decisions made by customers in the last 12 to18 months.
“For FY21, the impact will be more pronounced in the first half of the year. The good news is that this fundamental problem is absolutely within our control and fixable. In fact, we're making good progress on bringing the new DXC to our customers, which should help stem future revenue run-off.”