DXC Technology Company (NYSE: DXC)
A class action has been filed in the United States District Court for the Northern District of California on behalf of purchasers of DXC Technology Company (NYSE: DXC) securities pursuant to the April 1, 2017 transaction by which Hewlett Packard Enterprise Company’s Enterprise Services segment was spun off and merged with Computer Sciences Corporation, Inc. to form DXC.
The DXC class action lawsuit alleges that the Offering Materials issued in connection with the Offering were false and misleading and omitted to state material adverse facts regarding DXC’s business and prospects. Specifically, defendants failed to disclose that: (1) the incoming management team’s “workforce optimization” plan involved implementing arbitrary quotas and cutting thousands of jobs at DXC; (2) the jobs that were particularly at risk of being cut were held by longer tenured, knowledgeable, and highly compensated senior personnel; (3) these job terminations were selectively timed to artificially inflate reported earnings and other financial metrics; (4) at the time of the Merger, the incoming Chairman, President and Chief Executive Officer of DXC, defendant J. Michael Lawrie, had forecasted plans for a $2.7 billion workforce reduction in the first year; and (5) as a consequence of the workforce terminations, DXC was unlikely to deliver on client contracts, causing DXC’s clients to be dissatisfied and its customer relationships to be impaired.
On February 6, 2019, DXC’s former Executive Vice President and Head of Global Delivery filed a civil complaint detailing defendants’ efforts before the Merger to implement substantial lay-offs and manipulate earnings and alleging that certain officers of DXC were heavily focused on using cost-cutting efforts and layoffs to inflate short-term financial metrics, which substantially impaired DXC’s ability to deliver contractually required services to clients.
On August 8, 2019, DXC lowered its fiscal 2020 guidance to expected revenue of between $20.2 billion and $20.7 billion, representing a $500 million shortfall from DXC’s previously issued guidance. On this news, DXC’s stock price fell $15.74 per share, or over 30%, to close at $35.91 per share on August 9, 2019. And by the commencement of the action, DXC stock was trading as low as $32.70 per share, a nearly 45% decline from the price at which the stock was trading at the time of the Merger.
If you are a current shareholder and/or purchased stock pursuant to the April 1, 2017 transaction by which Hewlett Packard Enterprise Company’s Enterprise Services segment was spun off and merged with Computer Sciences Corporation, Inc. to form DXC and would like to discuss your options of exercising your rights as a shareholder, please contact us.
Please submit the following information so we can determine if you qualify for the suit. If you don't know all the specific details, partial information is also acceptable.