DXC Technology expects revenue to decline for a ninth consecutive year in FY27, with guidance for another 3-5% decline following years of market transitions. According to reports from Business News, the US-based IT services company, which employs about 38,000 people in India - roughly a third of its global workforce, is attempting to reverse this decline through a comprehensive turnaround strategy. The company's revenue fell to ₹10,000 crore ($12.6 billion) in FY26, only marginally higher than Wipro's ₹8,400 crore ($10.5 billion), despite being formed in April 2017 through a merger between Computer Sciences Corp. and Hewlett Packard Enterprise's tech services division.
DXC's turnaround strategy centers on three key priorities as outlined by Ramnath Venkataraman, president of consulting & engineering services. The company is expanding sales of its AI platforms and deepening presence in industries where it has strong footholds. According to reports from Business News, DXC is seeking to deepen AI capabilities through strategic partnerships, including new-age partnerships like Anthropic. The company announced a partnership with Anthropic last month, using Anthropic's Claude AI to build AI products and speed up internal work while helping Anthropic sell Claude to large companies and governments. This partnership is expected to change the company's growth trajectory and bring it in pole position for platform-based services growth.
The second priority involves winning more business from governments, banks, and aerospace firms, which collectively contribute about 50% of DXC's full-year revenue. As reported by Business News, DXC's revenue is distributed across IT services, cloud and cybersecurity (50%), engineering and consulting services (40%), and insurance software and services (10%). The company is also seeking to improve execution through enhanced go-to-market muscle, addressing challenges from a decade of revenue decline where traditional IT services business shrank sharply and the company divested three businesses contributing more than ₹37,000 crore ($4.5 billion) in annual revenue.
DXC is implementing AI-driven cost optimization initiatives to improve operating margins, targeting cost savings of up to $1.5 billion by replacing humans with AI agents. According to reports from Business News, the company's operating margins fell 20 basis points to 7.7% last year and expects margins of up to 7% this fiscal. Management acknowledges that the prolonged revenue decline stems largely from exposure to declining businesses, with CFO Rob Del Bene noting that too much of the company's offering portfolio and sales focus were aligned to parts of the market that were structurally declining due to market transitions including cloud shift and automation rise.
Despite the strategic turnaround plan, analysts remain cautious about DXC's execution capabilities. Keith Bachman from BMO Capital Markets noted that while DXC is attempting to reposition away from declining segments toward growth-oriented ones, the firm remains on the sidelines awaiting evidence of successful execution against strategic ambitions. As reported by Business News, investor sentiment reflects this skepticism, with DXC's shares falling 32% since the start of the year on the New York Stock Exchange. The company's prolonged revenue decline, which management attributes to overexposure to shrinking market segments, has created persistent headwinds that continue to affect reported performance well beyond initial customer termination decisions.
