EDS to trim work force by 8,000 more

Computer services firm to take unspecified charge

July 29, 1999|By BLOOMBERG NEWS

PLANO, Texas -- Electronic Data Systems Corp. said yesterday that it will take a charge for an early retirement and severance program aimed at trimming thousands of jobs at the second-biggest U.S. computer services company.

EDS is offering early retirement to 8,000 U.S. employees, or about 6 percent of its worldwide work force. In addition, it plans to cut an unspecified number of U.S. jobs later this year.

"We'll try to get those charges written down as quickly as possible," said Reed Byrum, an EDS spokesman. He declined to specify in which quarter the charge will be reported, and said the amount has not been determined.

The retirement and severance programs are part of a broader $1 billion cost-cutting plan recently outlined by Chairman Richard H. Brown.

The latest cuts come on top of 5,200 jobs eliminated earlier this year. EDS took a $379.8 million first-quarter charge for those firings, along with asset write-downs and restructuring costs, resulting in a loss of $20.6 million, or 4 cents a share.

EDS, based in the Dallas suburb of Plano, is scheduled to release second-quarter results after the close of regular U.S. trading today. First Call Corp. estimates the company's profit will be 43 cents a share. Other estimates range from 39 cents to 45 cents.

The early retirement program was reported earlier by the Dallas Morning News.

EDS shares fell 31 cents to $62.56.

Brown, who took over as chairman and chief executive officer in January, is revamping the company to make it more competitive with International Business Machines Corp. and others.

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