EDS hints at broader redundancies
Published: 27 Aug 2003 09:20 BST
Electronic Data Systems is hinting that it may trim its work force more deeply than it announced in June.
The computer services company said in June that it would cut about 2 percent of its employees, which translates to laying off about 2,700 workers. EDS has been struggling for some time to improve its competitive position.
"We may reduce our work force by more than 2 percent in connection with our ongoing transformation efforts," EDS said in a regulatory filing Monday.
By "transformation efforts," EDS was referring to its push to concentrate on outsourcing, taking on tasks such as managing software applications or processing claims for other companies. EDS spokesman Kevin Lightfoot said the company has not made specific plans to increase the job cuts beyond 2 percent. "No final plans have been confirmed," he said.
Lightfoot said that EDS expects to make about half the job cuts, and perhaps more, in its European operations.
The work force reduction described in June came in the wake of another round of cuts EDS announced last October. At that time, it said it would shrink its work force by 3 percent to 4 percent over the following several quarters.
The company had 137,000 employees in June.
EDS has been trying to right itself after nearly a year of difficulties, not least of which has been a sluggish technology spending climate. The company has also weathered a drastic earnings shortfall, a US Securities and Exchange Commission probe and a management shakeup.
In March, EDS replaced chief executive Dick Brown with Mike Jordan, the former chief of CBS.
Part of EDS' strategy has been to boost its presence in countries with lower labour costs. In June, the company said it would continue to invest in its "Best Shore" initiative, which involves locating software development work and customer support centres in countries such as Egypt, New Zealand, Canada, Brazil, Ireland and India.
EDS said that, in the second quarter, it achieved "modest growth" in information technology and business process outsourcing revenue.
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