DXC Technology Company Class Action Lawsuit
- Company Name
- DXC Technology Company
- Stock Symbol
- Class Period
- Purchasers of DXC common 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
- Motion Deadline
- November 15, 2019
- Northern District of California
On September 16, 2019, the DXC Technology Company class action lawsuit was filed charging DXC, Hewlett Packard Enterprise Company (“HPE”), and certain of their officers and directors with violations of the Securities Act of 1933. The DXC class action lawsuit was commenced in the Northern District of California on behalf of purchasers of DXC common stock pursuant to the April 1, 2017 transaction by which HPE’s Enterprise Services segment was spun off and merged with Computer Sciences Corporation, Inc. (“CSC”) to form DXC and is captioned Costanzo v. DXC Technology Company, No. 3:19-cv-05794.
DXC is a technology company that provides end-to-end information technology services. In April 2017, HPE spun off its Enterprise Services segment, merging it with CSC to form DXC (the “Merger”), pursuant to a registration statement and prospectus filed with the U.S. Securities and Exchange Commission (the “Offering Materials”). On April 1, 2017, defendants completed the Merger, issuing over 140 million shares of DXC common stock to former CSC shareholders (the “Offering”). Each CSC share held prior to the Merger was exchanged for one share of DXC common stock. On April 3, 2017, DXC common stock began trading on the NYSE at $59 per share.
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.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased DXC common stock pursuant to the Offering to seek appointment as lead plaintiff in the DXC class action lawsuit. A lead plaintiff will act on behalf of all other class members in directing the DXC class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the DXC class action lawsuit. An investor’s ability to share in any potential future recovery of the DXC class action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff of the DXC class action lawsuit or have questions concerning your rights regarding the DXC class action lawsuit, please provide your information here or contact counsel, Brian E. Cochran of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at email@example.com. Lead plaintiff motions for the DXC class action lawsuit must be filed with the court no later than November 15, 2019.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For six consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.