According to the Complaint, in April 2017, Hewlett Packard Enterprise Company ("HPE") conducted a Merger by spinning off its Enterprise Services segment, merging it with CSC, and forming the company now known as DXC. DXC is a technology company that provides end-to-end information technology services.
The Complaint 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, the Complaint alleges 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.
On November 19, 2019, the Court issued an Order appointing Lead Plaintiffs and Counsel. Lead Plaintiffs filed an amended Complaint on January 8, 2020. Defendants filed a Motion to Dismiss the amended Complaint on February 24. On July 27, the Court issued an Order granting Defendants' Motion to Dismiss. Plaintiffs were given leave to amend the Complaint.