Dive Brief:
- DXC Technology is betting on AI engineering expertise to kickstart revenue growth, executives said last week during a Q2 2027 earnings call for the three months ended Sept. 30. The IT services and consulting firm's revenue declined 4% year over year to $3.03 billion and its full-year revenue is projected to be 5% below the prior fiscal year, CFO Robert Del Bene said.
- The company has more than 5,700 Anthropic-certified engineers on staff and is fostering a forward deployed engineering practice to help customers overcome AI scaling hurdles, according to DXC CEO Raul Fernandez. More than 500 DXC engineers recently participated in a multi-vendor FDE bootcamp and Fernandez attended an August Anthropic partner training for engineers.
- “Working and learning alongside dozens of DXC teammates and FDEs-in-training from other companies gave me a close and upfront appreciation of the operating complexities of being an AI builder,” Fernandez said. “It also gave me insight into what human capital skills are needed to be an AI player in an AI world.”
Dive Insight:
As DXC deepens its bench of AI deployment engineers, the company is seeking buyers for its growing insurance industry software business. Fernandez confirmed that sales discussions were ongoing but offered no further details, focusing instead on DXC’s AI maneuvers.
The company rolled out a two-track business strategy a year ago to separate traditional enterprise IT services, including its Hogan banking platform and SAP practice, from an AI-focused “fast-track” that launched DXC’s AdvisoryX AI consulting unit and Xponential AI adoption framework. In July, the company reorganized its leadership team, appointing AI-startup entrepreneur Paul Taylor as president and elevating former CTO and CIO Dan Gray to president of global infrastructure services.
“Creating a growth company out of DXC is an ongoing exercise that will be bolstered by our work in strengthening the core track and growing our agentic fast-track and AI-based solutions,” Fernandez said during the earnings call. “The addition of Paul Taylor and his operational accountability and execution focus as our president gives us a path to achieving that goal.”
DXC’s consulting and engineering segment saw revenues decline 3.3% year over year to $1.2 billion in the most recent quarter. Its global infrastructure services segment also lost ground, with revenues dropping by 10% to $1.4 million.
Exiting the insurance business is a risky move, according to Jay McBain, chief analyst at Channel Dive sister company Omdia.
“Selling its most profitable segment may fund debt reduction and AI transformation but leaves DXC increasingly dependent on declining, lower-margin services,” McBain said. “The transformation remains strategically plausible but high risk.”
An FDE ramp up is challenging, too. Gartner expects most initial FDE interventions to fail by 2028 and DXC faces stiff competition for scarce talent.
“Competitors such as TCS, Infosys, Wipro, Cognizant and HCL have already announced more FDEs than DXC and the very large global systems integrators have tens of thousands of AI certifications,” McBain told Channel Dive.
DXC had 86 confirmed FDEs in July and hasn’t updated that number. Fernandez instead focused on AI vendor certifications and products.
The company brought to market several AI-based offerings since partnering with Anthropic in June, including a code auditing tool powered by Claude Mythos introduced during the earnings call and the DXC Workspace Services agentic IT operations platform announced in August.
The company’s ongoing revenue woes underscore the difficulties inherent in scaling AI at the enterprise level.
“The complexity is increasing. The time to value in terms of delivering an AI project is decreasing. But the unlock behind that is substantial,” Fernandez acknowledged.
