DXC Technology Company
| Company Name | DXC Technology Company |
| Stock Symbol | DXC |
| Lead Plaintiff Motion Deadline | November 15, 2019 |
| Status | 1 |
On February 6, 2019, a civil complaint was filed, alleging that certain officers of 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.
On August 8, 2019, after the market closed, the Company lowered its fiscal 2020 guidance, expecting revenue between $20.2 billion and $20.7 billion, representing a $500 million shortfall from previously-issued guidance.
On this news, the Company’s share price fell $15.74, or over 30%, to close at $35.91 per share on August 9, 2019, thereby injuring investors.
By the commencement of this action, DXC stock was trading as low as $32.70 per share, a nearly 45% decline from the $59 price per share at the time of the Merger.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the planned “workforce optimization” plan involved implementing arbitrary quotas; (2) that the plan would cut thousands of jobs at the Company; (3) that jobs that were particularly at risk of being cut were held by longer-tenured, knowledgeable, and highly compensated senior personnel; (4) that these job terminations were selectively timed to artificially inflate reported earnings and other financial metrics; (5) that, at the time of the Merger, defendant Lawrie had forecasted plans for a $2.7 billion workforce reduction in the first year; (6) that, as a result of these workforce terminations, the Company was unlikely to deliver on client contracts; (7) that, as a result of the foregoing, the Company’s clients would be dissatisfied and the relationships would be impaired; and (8) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
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