Class action lawsuit has been set against the tech giant DXC technology claiming that the company used timed job cuts to meet short term profits. The job cuts have impacted the performance of the organization as it has as an effect on the company’s ability to deliver its contracted services.
The senior management allegedly used mass cut off to enhance the earnings of the company; however, the workforce cut led to difficulty in servicing the contracted clients.
Lawsuit Against DXC to defend Investor Interests
Bragal, Eagle and Squire PC, a New York-based litigator for security cases, has filed documents on behalf of the investors in the US District Court of North Carolina District. This publication is to talk about the interests of the previous and current owners of DXC stock.
Offerings Manual – Missing Risks
On 27th February 2017, DXC issued an Offering Manual which talked about workforces transformation and duplicate role deletion. Offering Manual also spoke about retaining motivated and skilled employees to service its clients.
Unprecedented Job Cuts led to Employee and Client Dissatisfaction
The lawsuit claims that the impact of undisclosed job cuts has been severe, and DXC failed to deliver clients contracts. Client satisfaction dropped drastically and also led to a decline in employee morale. The financial metrics of the offering material thus turned unrealistic.
The complaint further states that these material facts like the uncertainties and known risks have not been disclosed.
The disclosure was required as per the US Securities and Exchange Commission regulations as they can affect the performance of the business in the future. These risks should be a part of the Offering Material.
The Stocks Price falling Down
The stocks of the DXC have fallen from 59 dollars to 31 dollars, and this has given considerable losses to the investors. They seek to recover the damages by this lawsuit.
The class-action lawsuit imposed on DXC talks about the unprecedented loss to the investors and alleges senior management of unruly job cuts to show bloated earnings.