Our correspondents have confirmed that James D Cook, the last surviving member of former CEO Michael Laphen’s Senior Executive Team, has been terminated by CSC.
We wonder why.
Jim Cook survived over 2 years since Mike Lawrie took over as CSC CEO. So he has not been fired because of his previous association with Laphen; nor can Lawrie have needed two years to decide Cook was not up to his job.
We think the reason for Jim Cook’s departure may become evident when CSC announces its Q4 FY2014 results next month.
At the time of CSC’s Q3 FY2013 results, we said in our 6 February 2013 blog entry that we thought Mike Lawrie would aim to peak CSC’s share price about 12 months from then, around February 2014, then would maintain it at that level for a further 6 months to give time to sell off CSC.
We may have been over-optimistic about Lawrie’s ability to maintain the share price for a further 6 months. IBM shares have recently been sanctioned by the market for disappointing revenue results. CSC has that problem, plus sizable cracks appearing in the supporting wall called “technical excellence” due to its employee terminations and cut backs. Unexpectedly poor results in CSC’s Q4 FY2014 could change the view of the markets and any prospective acquirers.
Lest readers forget it is worthwhile summarising some of the earlier posts about management.
Firstly the problems with CSC performance have a long gestation. In the late 1990's and early 2000's CSC had a management team in place who most years oversaw double digit growth along with good profits. As with any large company changing and growing and fast there were some problems but in the main clients wanted what CSC was selling. Then the rot set in with over promotions of some people who let their 'success' go to their head. This led to most of the European management team leaving from the mid 2000's on. With the exception of two Presidents virtually all leadership left within a two year period. At the same time every single Finance chief in every country in Europe left as well. Now why is that you might ask? Were they no good and unable to keep up with the growth or was something more fundamental happening? All you can do is note that within a couple years of these key players leaving CSC's decline started. Then the US and other countries started down the same road of poor performance and flagging sales. Were they infected by some virus that moved from Europe across the company? Also worth noting is that none of the law suits from investors and clients date from that time. They occurred on the watch of the next generation of management put in place by the 'over-promoted'. This next generation is already being superseded by third and fourth generations who seem to have a short life span. Hence the recent postings about 'disappearings'.
As we have said before "only time will tell who is right".
Events at CSC are playing out rather like that classic WWII film, The Great Escape, where in the midst of the slaughter of war, for that read massive continuing lay offs at CSC, a bunch of officers are digging their way out under the wire hoping to get free to spend their bonuses. Some managers have managed to get away from Stalag Luft CSC while others have perhaps been 'caught' trying, or is it disagreeing with the boss, and seem to have disappeared. This month alone three new senior business managers have been hired to run various business units, while there is no news of their predecessors. Add to these the loss of senior HR and 'Cloud' favourites and the head of UK and Ireland - all put in place only recently and a disturbing pattern emerges. Have they been 'executed' and buried or what? More critically were they mistaken hires and promotions. The employees, the share holders, and customers need to know. Information on latest lay offs can be found here at Siege of Stalingrad
Information - such as it is - about new hires can be found here at Now You See Himand here at Now You Don't and here at We were only following orders But seriously, what we have here are three new high-level business managers put in place by Lawrie replacing business managers previously put in place by Lawrie. The replacement of UK lead not included. On top of that there are functional bosses in places like Cloud and HR put there by Lawrie who have also gone and I would guess others we have missed. All these people almost certainly had retainment bonus clauses in the their packages but they have gone anyway. On top of that you can bet they were paid more than their predecessors.