EDS top exec resigns

EDS said Bob Mintz, executive vice president of human resources since last April, is leaving the firm for personal reasons. Mintz, a former Time Warner executive who joined EDS last April, was leading a large project to revamp employee compensation and change performance reviews. His last day is Friday.

While the firm searches for a replacement, John Wroten, vice president of administration, will lead EDS's HR initiatives, including assessing staffing needs, ranking employees based on performance, and adhering to compensation guidelines.

The announcement comes before sweeping changes expected in the coming weeks at the Plano, Texas-based firm under new chairman and CEO Dick Brown, who started work in January.

Mark Wolfenberger, analyst at Credit Suisse First Boston, said EDS has made changes at a "glacial pace," which some top executives may find frustrating.

"Their business model doesn't allow for rapid, dynamic changes," he said. "They are very much like the IBM of the late 80s. There needs to be dramatic actions taken to put the company back on a positive path."

However, analysts expect Brown to announce job cuts for about 1 percent of EDS's worldwide workforce--or roughly 1,100 workers--when he outlines a significant restructuring plan next month. The company has already given an undetermined number of employees 60 days to find new jobs internally or leave.

EDS employs about 119,000 people and recently began reviewing and ranking employees according to job performance, analysts said. Under the new ranking plan, employees who perform in the top 25 percent will be rewarded with higher compensation, while the bottom quarter will either improve or lose their jobs.

Despite Mintz's departure, the "new initiatives to return the company to a performance-based culture will continue uninterrupted," the company said in an internal memo.

"Our efforts to build a performance-based culture will continue," Brown stated in Friday's memo. "The best people will receive the best rewards and opportunities. We will ensure that the development of all employees aligns with the company's highest-potential business opportunities."

Brown late next month is expected to address Wall Street analysts, detailing cutbacks and changes at the $15 billion firm.

In recent years, EDS has struggled as profit margins dwindled from its biggest customer and former parent company General Motors. EDS, which was spun off from GM in 1996, depends on the auto maker for about 20 percent of its revenues. In recent years, EDS has also slipped from its No. 1 spot in the services market to IBM Global and faces fresh competition from a host of new services firms.

Since he began work, analysts say Brown has kept EDS tucked away from Wall Street scrutiny. In past public meetings, Brown has said little more than that he will focus on expanding EDS's customer base and more hotly pursue emerging markets, such as electronic commerce.

But the new CEO has already made some symbolic moves in-house, eliminating several corporate jets, cutting a company helicopter, and ridding the firm of its "reserved" parking spaces. He has also sent out messages to employees asking them to cut costs wherever they can.

"He's cut a third of the plane fleet, he's writing personal emails to everybody," said BT Alex Brown analyst Ed Caso. "I think the vibes are pretty good. He's setting a new tone."