I would like to thank all of the current and former SAIC employees who responded to my post last week on the planned breakup of the company. While I am not surprised that so many of you posted your own opinions, I am surprised by the attention my post generated outside of SAIC. Washington Technology ran a piece on my remarks last week and The Washington Post reprinted the body of my blog post.

It seems that most of you have a similar reaction to the new SAIC as I do. The breakup of SAIC is certainly not in keeping with the way that I used to run the company.

However, times have changed — over and over again. We’ve had three new CEOs in the eight years or so since I left the company, the share price has dropped significantly, and the virtues of employee ownership have been well demonstrated by what happens to a company when it is taken away.

I don’t see that there has been any improvement in the financials or working conditions. I hope that’s not true.

– Bob


28 Responses to “Reaction to Planned Breakup of SAIC”

  1. 1 Damian

    It is great news that SAIC is going to break up. This is certainly a positive trend as was making the stock public. There has always been a need for oversight, responsibility, accountability, and transparency that was addressed through those two major events.

    The CEOs brought trends that retained and rewarded employees. Employees that not some trivialized line item associated with profit/loss margins, but are someone whose contributions are valued.

    Keep moving in the right direction.

  2. 2 Dr. Beyster

    Damian: It might not surprise you to learn that I disagree with you. I personally believe that the breakup of SAIC is not a positive move on the company’s part. There’s power in size and volume. Companies can have accountability and transparency without being split apart into smaller pieces. — Bob

  3. 3 Sally

    My husband works for SAIC and has for over 16 years. He was so very proud to work for this employee owned company and talked about how great a company it was.
    But things have been changing at SAIC and not for the better where the employee is concerned.
    Ever since SAIC went public things have really changed fast. I think my husband feels like a small piece of sand in a very large desert. Unseen, unappreciated, the way almost everyone he knows at SAIC feels. The company has chipped away at their employee’s benefits until they the are few and far between. Now their health insurance is changing. Instead of really good insurance at a decent price employees are going to have to pay more for far less coverage.
    They (SAIC)have the gall to post a video on the SAIC healthcare website saying how much they appreciate their employees and what a wonderful thing this new health care plan is. My husband can stand to watch it as the COO explains great it is. I Stu Shea doesn’t have SAIC standard company plan for his insurance!
    The SAIC Healthcare Plan Website. http://www.saichealthyfocus.com/default.aspx

  4. 4 Dr. Beyster

    Sally: Thank you for posting on my blog. Employee ownership worked well at SAIC for many years, and I still hear from employees who tell me that it was an important part of their experience with the company. Please give my best wishes to your husband. I congratulate him on his more than 16 years of service to SAIC and to our nation. — Bob

  5. 5 Kim

    Dr. Beyster,

    I have worked for SAIC for over 21-years and I must say that I never thought I would see SAIC as it is today. This past year at SAIC has been one of the most heartbreaking for those of us that remember the true SAIC Company. I work in Oak Ridge in the Craver Group and all of my coworkers are equally saddened by what has happened to, what we used to call, our company. I was talking with my manager earlier today and we were discussing the differences in the new SAIC employees as opposed to those that were part of the employee-owned company – the differences are vast.

    Because of the self-serving leadership from the SAIC corporate offices and the board of directors SAIC will split in two. We are being told that OCI is the reason. Do they really think we believe that? Prior to the past three CEO’s SAIC did very well, our stock was great, NSI was a money-maker for SAIC, Telecordia, and I could go on. SAIC wasn’t just another corporate tank, it was where we made lifelong friendships, our children grew up together, we would all work together for the good of the company no matter the time or effort extended. What a great company SAIC was in the past!!

    My two cents worth on naming the two companies coming from the split – neither company deserves the right to be called SAIC. Of the corporate management for both companies there are only two SAIC employees that were part of SAIC employee ownership, the others are ‘new’ SAIC employees.

    What a sad time for those of us that remember a much better time. The days when everyone wanted to work for SAIC because it was unique and so unlike the mainstream. Unless someone has worked for an employee-owned company like the old SAIC, they have no comprehension of what I have just expressed. Damian mentions that the CEO’s brought with them trends that retained and rewarded employees, so he thinks. I’ll bet Damian has yet to receive a $5K, $10K, or higher bonus for his efforts on a proposal or a contract win. I’ll bet Damian doesn’t have plaque on top of plaque rewarding him for his efforts.

    Thank you, Dr. Beyster, for giving to us SAIC and all that came with it. I know that I have been truly blessed. Go Blue!!

  6. 6 Shane Taylor

    Dr. Beyster,

    I worked for SAIC for over 25 years, from Oct 18, 1983 when I joined the company fresh out of college as a Physicist, until April 15, 2009, when I retired from corporate life, sick of what SAIC had become. SAIC was the only company I worked for, professionally. During that time, I moved from being an entry level programmer/scientist, to working on ‘star wars’, to IT Outsourcing, to serving as the last Division manager resident in Alaska. I was fortunate enough to end my career working on a very interesting Navy project, that is, until upper management ruined that too.

    I remember the many years where working on a project meant something to us all, and were personally invested in it because this was OUR company. It is a feeling and concept relatively few will every experience or appreciate. I am tremendously grateful to you for giving me, and thousands of my friends and workmates, the privilege to have such an awesome experience. Some of my friends still work for SAIC, and they all seem unhappy, because they know what it used to be, and it is far from that today. I no longer own any SAI stock, selling it (luckily) back when it was still over $20/sh.

    I miss the interesting work from past years, meetings week, proposal development in La Jolla, working with our customers, and helping new employees understand what it meant to be an employee-owner. I think I can speak for thousands of other ‘vintage’ SAIC employees when I say that we missed you from the very day you left.

    Thank you.
    Shane

  7. 7 Dr. Beyster

    Shane: I can sympathize with you since I had some unpleasant experiences during my final days at SAIC. — Bob

  8. 8 Dr. Beyster

    Kim: I don’t understand the reasoning behind splitting up the company. I thought it was important to have as many disciplines in SAIC as we could, so long as they were making money. I keep hearing that the reason given for the split is concern with potential organizational conflicts of interest. It sounds to me like some Harvard Business School solution to a problem we already solved. Thanks for contacting me. — Bob

  9. 9 Diana P

    I joined SAIC in Aug 2010 just 6 months prior to the CityTime scandal, and I was in the NYC office. I learned that SAIC was not a people-company the first day I came in. No one was there to greet me, even though I was scheduled to arrive that day at 8:30am. I came back later that afternoon after one of my colleagues called me to come in, but no management was present to greet me that day. From then on, it has been a sad story in the office, from one layoff to the next, moving from one office to the next, until it is now just me and my colleague. And then the NYC office will close for good end of February. While I still believe that SAIC is a good company to work for, it’s not a people-oriented company, and I would not invest in a company that does not invest in its people.

  10. 10 joel bengston

    Bob:
    My advisor at Merrill-Lynch says the breakup is a common action by companies that think (hope?) their stock is underpriced.
    I despair of the obvious incompetence of the current management.The rash of departures shows I’m not alone.
    Best wishes. Too bad I missed you on Thanksgiving at the LJBTC.
    -Joel Bengston

  11. 11 Dr. Beyster

    Diana: I am sorry to hear that the New York City office will be closing early next year. I hope that you will have better luck in your next assignment. — Bob

  12. 12 Dr. Beyster

    Joel: Your investment advisor has an interesting perspective. While I’m not in favor of the split, as a shareholder I hope he is right. It’s good to hear from you again; please keep in touch. — Bob

  13. 13 JB

    This break up of SAIC has caused alot of smart people to lose their jobs. SAIC is a sad place to work right now. The break-up doesn’t seem to be a good idea and I don’t see how breaking it up will make more money for SAIC. The name is only going to go with one of the companies and the size of the company will be lower. When I first joined SAIC, I loved it and was happy with the way it was run. I hope SAIC does well in the future, but right now it is hard to tell.

  14. 14 Dr. Beyster

    JB: I agree with you — I hope SAIC does well in the future. In my experience, SAIC’s employees are among the best in the business. I have confidence in their ability to succeed, even when the company is split apart some day in the future. — Bob

  15. 15 New Life

    I was a long time happy employee and then the IPO came which I voted against. Then came the various CEOs and saw how the employee didn’t matter because it was all about the stock holders. The company became cheap with it’s employees.

    When I saw the company was going to split I read the writing on the wall to bail. I am hoping the new IPO next year goes well so I can sell all my stock for a gain instead of a loss now. My gut feeling is that someone in the SAIC food chain is hoping to have either new company gobbled up by the big boys they couldn’t compete with. I’ve heard of layoffs approaching the thousands and the awful new health care in store for next year. I am saddened for my friends and prior colleagues.

    I am so much happier now elsewhere and actually enjoy getting up for work, unlike the last few years. The new blood is bad news and the old timers are saturated by the Kool-Aid. You did well Bob. The others just couldn’t keep up.

  16. 16 Dr. Beyster

    New Life: Thank you for the kind words. I hope things don’t turn out as bad as it sounds like they might. — Bob

  17. 17 Cathy

    The new name has been announced and I am so saddened by the split, the name, the environment at SAIC right now. I am a 28 year SAIC employee. I started back in ’76, and with a brief haitus in ’86, returned to the company I love in ’95 because SAIC gave me opportunity after opportunity to learn and grow so much! I have always felt SAIC was MY company. I have tried to roll with the punches knowing that change is a way of life now that we are public. But this is all too much anymore. I won’t be able to finish out my work career with my SAIC. I’ll be working with this other entity who’s last remaining piece of SAIC it no longer has, the name. Thank you Dr Beyster for the many good years I did have. Cathy

  18. 18 Dr. Beyster

    Cathy: Thank you for your post. I have heard from many people who feel the same way you do. I wish that I had the power to change the way things are going with the company, but I can only watch from the sidelines. Thank you for your many years of service. — Bob

  19. 19 Richard

    The resulting market cap of the new companies is a big concern. SAIC is competing with defense contractors whose companies range from $7B to $25B market cap … Current SAIC market cap is $4.4B, a bit low, but manageable in this environment. By my estimation is that the new SAIC (assuming roughly a 64/40 split) will have a market cap of only $2.6B, and with 55% Institutionally owned, could be a ripe takeover target by any competitor with $15-$20B capitulation.

    I wonder what percentage of SAIC stock is still employee owned? And would it be too far-fetched to think an employee buy-back could take the company private again?

    While it may have been lost at the upper levels, employee ownership pride and entrepreneurial attitude is still alive and well in my operation … hopefully others as well.

  20. 20 Dr. Beyster

    Richard: I am glad to hear that your part of SAIC still has a strong employee ownership and entrepreneurial spirit. I keep hearing bad news about the company so it is nice to hear some good news too. — Bob

  21. 21 Anonymous

    I have been with SAIC for over five years. I am personally really excited to be part of Leidos now. I think removing the OCI’s is a forward-thinking concept brought on by strict new government rules. I am sure Leidos will be just as, if not more, powerful of a company.

  22. 22 Dr. Beyster

    Anonymous: I hope you are right. — Bob

  23. 23 James

    Dr. Beyster,

    I too have been saddened as I have watched all of my friends and former colleagues gradually drift away from SAIC. I left back in 2003, but stayed in the consulting pool through 2004. I have very fond memories of my time at SAIC including those long proposal development trips to Campus Point (La Jolla felt like my second home for a few years….). I credit the culture and experience at SAIC with helping me to have the skills and confidence to start my own company.

    The employee ownership culture at SAIC was so unique and I tell people how lucky I was to work at SAIC during those days.

    Thank you for your vision and hard work in creating such a unique company. I believe there are quite a few of us out there who started companies based on what we learned at SAIC. You should be very proud of that legacy.

    Best regards,
    James

  24. 24 Ed Murphy

    In recollecting the original SAIC, I feel compelled to tell a tale regarding employee ownership. I was once talking to a founder CEO (like yourself) about possible acquisition of his company by SAIC, and he told me the following story:
    ” I met your founder, Dr. Beyster, a few years ago and I told him that I had started my company in 1969, the same year SAIC was founded. I said that my company had grown to almost $100 million in revenue while SAIC had grown beyond $5 billion. I asked Dr. Beyster what was the difference between our companies that caused such different growth rates. He asked how much of my company I owned; I replied “100%”. He said, “that’s the difference”.”

  25. 25 Dr. Beyster

    Ed: I enjoyed your story very much. As you know, employee ownership really did separate us from the competition, and we achieved some great things together. I wish you well. — Bob

  26. 26 Dr. Beyster

    James: Congratulations on starting your own company. I can appreciate what a big step this is, and I wish you good luck in your new venture. What exactly does your business do? — Bob

  27. 27 JP

    Dr. Beyster,

    I joined SAIC in 2002 and stayed nearly ten years. The last year I saw my boss removed from our contract, me put in charge, and then SAIC effectively banned from bidding on new business with our former customer. I was put in charge of what was left for the last six month period of performance, and when it was over, didn’t even get a thank you from anybody in my “chain”. What a difference from the great Company I joined and loved working for in 2002! The way the Company handled the IPO was disgraceful in terms of the financial impact on employee-owners; especially the cash payment for the 1/2 value our stock depreciated, and how it was treated as regular income instead of the expected capital gain. And you know well how its value has gone down since that time. I feel fortunate to have sold everything I owned at $17. Most of my options were under water, so I walked away from those too. As many others have said in this space, things went south very quickly after the IPO in terms of our SAIC employee-owner culture. Sad indeed. But I wanted to thank you personally for the wonderful time I had before all that, and for an opportunity to be part of such a great company, even for just a little while.

  28. 28 Dr. Beyster

    JP: Thank you for your note. I am sorry to hear about the way you were treated during your final days with the company. Leaving the company wasn’t a very pleasant experience for me either, but I still have sympathy for the other good people who are still there. — Bob

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