EDS sees more job cuts, offers early-out plan
In a steady effort to cut costs, services giant EDS announces an early retirement plan to its employees and also says it plans to further reduce its workforce.
In a memo distributed to employees last night, the Plano, Texas-based firm detailed plans of an early retirement offer and a uniform severance plan newly created by EDS's corporate human resources department, according to Reed Byrum, director of corporate public relations.
"At this point, we believe through the end of the year we'll continue to have reductions of our workforce," said Byrum. He added that since February, EDS has acted on its first phase of the plan, cutting the projected 5,200 jobs. EDS currently has 120,000 employees worldwide.
"The company is focused on costs, and this is a labor based business," said Gregory Gieber, an analyst at Brown Brothers Harriman. "In that respect, further [workforce] reductions are not unexpected."
The company's early retirement plan is offered to EDS's U.S. employees 50 years of age or older, who are also vested in the plan. About 8,000 employees will be eligible to take advantage of the plan. "About half will take a serious look at the offer...it sweetens the current retirement policy," said Byrum.
He added, "This all comes in the context of [CEO] Dick Brown's early goal of taking $1 billion in cost savings out of EDS in order to make our delivery keener and more agile to customers, to deliver a stronger company to Wall Street, and most importantly, to have employees remain and grow in a stronger company."
EDS's Brown in April announced that the firm would slash 5,200 jobs in an effort to cut $1 billion in costs.
As earlier reported, about 60 percent of the jobs eliminated occurred in the United States, and the rest in Europe. The company also moved to lay off the bottom 20 percent of its sales force at the time, he said.