CSC announces layoffs in advance of HPE merger

Federal filing says 500 will lose jobs in shift to India, but CSC says layoffs unrelated to HPE merger

Computer Sciences Corp. is laying off workers as it shifts some work overseas, according to a federal application for employment benefits.

A federal Trade Adjustment Act (TAA) benefit application, filed on July 14, claims "CSC merging with HP (Hewlett-Packard Enterprise) caused services to be shifted to India. This included teleworkers in the US."

It says 500 workers are affected. The types of jobs are not described.

In May, Hewlett-Packard Enterprise announced it would spin off its enterprise services business and merge it with CSC. This combined entity will have about $26 billion in revenue.

CSC, however, says the layoffs are not a consequence of the merger, which isn't due to be completed until next March.

"Any reductions referenced in this application were taken by CSC in the normal course of business and are unrelated to the proposed merger," said Richard Adamonis, head of global communications at CSC, in an emailed statement.

The Texas Workforce Commission filed the request for TAA benefits with the U.S. Dept. of Labor for an unidentified CSC employee or employees in CSC's Global Infrastructure Services division.

In a separate action, CSC filed a WARN (Worker Adjustment and Retraining Act) notice on July 21, notifying Texas of about 155 layoffs that will occur on Sept. 23. The WARN notice concerns layoffs only in Texas, but the TAA application, if approved, can affect CSC workers nationally.

Mike Lawrie, the CEO of CSC, in detailing the merger to analysts in May, spoke of a "synergy realization" as a result of the merger. This typically means savings resulting from consolidation. With the merger, 50% of the labor force will be located in low-cost geographies, he told investors at an earnings call at the time of the merger announcement. Both HPE and CSC run extensive overseas operations.

TAA benefits, if approved, include income support for those who have run out of unemployment benefits and a wage subsidy for up to two years for older workers covering a portion of the difference between a worker's new wage and old wage. There are also relocation and education assistance, among other benefits.

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